Question - The Simpson Construction Company uses the percentage-of-completion method of accounting for long-term construction contracts.
In 2005, Simpson began work on a construction contract. Information on this contract at the end of 2005 is as follows:
Cost incurred during the year $1,500,000
Estimated cost to complete 6,000,000
Gross profit recognized in 2005 250,000
What is the contract price (total revenue) on this contract?