Algae builds large ships and uses the percentage of completion method of revenue recognition.The following information pertains to the construction contracts it had in place as of its December 31,2018 year-end.

How much revenue will Algae recognize in 2017?
A)$260 million
B)$325 million
C)$433 million
D)$1,300 million

Question

Algae builds large ships and uses the percentage of completion method of revenue recognition.The following information pertains to the construction contracts it had in place as of its December 31,2018 year-end.

How much revenue will Algae recognize in 2017?

How much revenue will Algae recognize in 2017?
A)$260 million 
B)$325 million 
C)$433 million 
D)$1,300 million

Quizplus · Accepted Answer

B)(Percent complete × Contract revenue)- Revenue previously recognized
= (200/800)× 1,300 - 0
= 325 million

Algae Builds Large Ships and Uses the Percentage of Completion