Question: A construction company entered into a fixed-price contract to build an office building for $42 million. Construction costs incurred during the first year were $12 million and estimated costs to complete at the end of the year were $28 million.
How much revenue will appear in the company's income statement in the first year using the percentage-of-completion method?
How much gross profit or loss will the company recognize in the first year using the percentage-of-completion method?