Question - WW Guy Contractors began a contract to build a new student union on the UNF campus during Year 1 for $455,000. Information concerning the project follows:
|
Year 1
|
Year 2
|
Year 3
|
|
Percentage of work completed
|
25%
|
35%
|
40%
|
|
Costs incurred during the year
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$86,000
|
$124,000
|
$ 90,000
|
|
Progress billings during the year
|
80,000
|
180,000
|
190,000
|
|
Cash collected during the year
|
65,000
|
170,000
|
220,000
|
How much revenue should WW Guy recognize during Year 1 if WW Guy uses the percentage of completion method?
$113,750
$80,000
$38,750
$450,000