Lagory Co.started a contract in June 2017 to build a bridge at a fixed price of $14 million.The bridge was to be completed by October 2019.Total cumulative costs incurred by the end of December 2017 and 2018 were $2 million and $6 million,respectively.Lagory Co.is unable to estimate the total costs of the project prior to completion.Final costs at the end of the project totalled $11 million.How much revenue will Lagory Co.report in 2018?
A)$2,000,000
B)$3,000,000
C)$4,000,000
D)$14,000,000

Question

Quizplus · Accepted Answer

C)(since Lagory cannot estimate total costs,use cost recovery method)
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Lagory CoStarted a Contract in June 2017 to Build a Bridge