A Bonita Springs contract is $2,350,000. Cost to date is $940,000 and estimated cost to complete is $1,410,000. Using percent complete, what revenue is earned?
Correct Answer
D) $940,000
Cost-to-date divided by total estimated cost gives percent complete; that percentage is applied to contract revenue.
Why This Is the Correct Answer
Cost-to-date divided by total estimated cost gives percent complete; that percentage is applied to contract revenue.
Why the Other Options Are Wrong
Option A: $940,000
$940,000 is not aligned with the supported result for percent-complete earned revenue; it has the wrong label or classification even if the number looks close.
Option B: $898,000
$898,000 is below the supported result for percent-complete earned revenue; it likely uses the wrong base, period, or account bucket.
Option C: $996,000
$996,000 is above the supported result for percent-complete earned revenue; it likely adds an unsupported amount or compares the wrong financial base.
Memory Technique
Controller Updates money test: bucket before math for percent-complete.
Reference Hint
Open-book path: tab Builder's Guide to Accounting, 2001 to Section One, Accounting Methods, Percentage-of-Completion Method; Section Three, Recording Before the Event, Percentage of Completion Adjustments; use the job ledger figures in the stem and recompute the same accounting measure.
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