Refer to Tullis Construction.How should Tullis report Construction in Progress and Billings on Construction in Progress at the end of year 1 on the balance sheet assuming the use of the percentage-of-completion method?
A)asset of $0
B)liability of $250,000
C)asset of $3,000,000
D)liability of $4,000,000

Question

Quizplus · Accepted Answer

Under the percentage-of-completion method, if Billings on Construction in Progress exceed Construction in Progress, the difference is reported as a liability. Here, the liability is $250,000.