Algor Inc. entered into a $975,000 3-year contract to maintain a client's computer system. At the end of the first year, the costs incurred on the contract were $225,000 and it was estimated that a further $520,000 would be incurred over the remaining years of the contract. What is the amount of profit that can be recognized on this contract for the first year? $196,875 $69.463 $421,875 $294.463
Algor Inc. entered into a $975,000 3-year contract to maintain a client's computer system. At the end of the first year, the costs incurred on the contract were $225,000 and it was estimated that a further $520,000 would be incurred over the remaining years of the contract. What is the amount of profit that can be recognized on this contract for the first year? $196,875 $69.463 $421,875 $294.463
Chapter5: Introduction To Business Expenses
Section: Chapter Questions
Problem 63P
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Question
![Algor Inc. entered into a $975,000 3-year contract to maintain a client's computer
system. At the end of the first year, the costs incurred on the contract were
$225,000 and it was estimated that a further $520,000 would be incurred over the
remaining years of the contract.
What is the amount of profit that can be recognized on this contract for the first
year?
$196,875
$69.463
$421,875
$294.463](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F2e12b5bc-1d98-4c89-9522-5ab0144e9238%2Ffc76b505-0023-4899-9bd3-e44af8a1b435%2Fvj0sy56_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Algor Inc. entered into a $975,000 3-year contract to maintain a client's computer
system. At the end of the first year, the costs incurred on the contract were
$225,000 and it was estimated that a further $520,000 would be incurred over the
remaining years of the contract.
What is the amount of profit that can be recognized on this contract for the first
year?
$196,875
$69.463
$421,875
$294.463
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