In spring 2015, Parmac Engineering Company signed a $1,000,000 contract with the city of Parkersburg, to construct a new city hall.
Parmac expects to construct the building within two years and incur expenses of $600,000.
Using the percentage-of-completion method how much revenue should Parmac recognize in 2015?
Construction costs incurred during the year $174,000
Estimated costs to complete the contract $426,000
Total costs $600,000
Total contract price $1,000,000