In year 1 a contractor agrees to build a building for $2,500,000 by the end of year 2.The builder's cost is estimated to be $1,800,000.The actual costs year 1 are $900,000 and year 2's actual costs are $1,300,000.Under the completed contract method the gross profit for year 2 is
A)$0.
B)$300,000.
C)$350,000.
D)$700,000.

Question

Quizplus · Accepted Answer

B)$2,500,000 - ($900,000 + $1,300,000)= $300,000

In Year 1 a Contractor Agrees to Build a Building