A contractor is analyzing a project with the following: Contract value $750,000, estimated costs $600,000, actual costs to date $450,000, and 70% complete. Using the percentage of completion method, what revenue should be recognized?
Correct Answer
B) $525,000
Under percentage of completion method, revenue recognized = Contract value × Percent complete = $750,000 × 70% = $525,000.
Why This Is the Correct Answer
Under percentage of completion method, revenue recognized = Contract value × Percent complete = $750,000 × 70% = $525,000.
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