Question - On May 1, 2011, Green Construction Company entered into a fixed-price contract to construct an apartment building for $3,000,000. Green appropriately accounts for this contract under the percentage-of-completion method. Information relating to the contract is as follows:
2011 2012
At December 31:
Percentage of completion ........ 20% 60%
Estimated costs at completion ... $2,250,000 $2,400,000
Income recognized (cumulative) .. $ 150,000 $ 360,000
What is the amount of contract costs incurred during the year ended December 31, 2012?
a. $600,000
b. $960,000
c. $990,000
d. $1,440,000