Automia Construction Company contracted to build an apartment complex for a price of $10,000,000. Construction began in Year 1 and was completed in Year 3. Below is a summary of the costs incurred and the estimated costs to complete by year. Costs Incurred Year Year 1 Year 2 Year 3 3,000,000 4,200,000 1,800,000 Est Costs to Complete 6,000,000 1,800,000 What Gross Profit (Loss) would be recognized in Year 2, assuming that gross profit is recognized over time? Note: Please round percentages to four digits (e.g., 0.6666).

Automia Construction Company contracted to build an apartment complex for a price of $10,000,000. Construction began in Year 1 and was completed in Year 3. Below is a summary of the costs incurred and the estimated costs to complete by year. Costs Incurred Year Year 1 Year 2 Year 3 3,000,000 4,200,000 1,800,000 Est Costs to Complete 6,000,000 1,800,000 What Gross Profit (Loss) would be recognized in Year 2, assuming that gross profit is recognized over time? Note: Please round percentages to four digits (e.g., 0.6666).

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Automia Construction Company contracted to build an apartment complex for a price of $10,000,000. Construction
began in Year 1 and was completed in Year 3. Below is a summary of the costs incurred and the estimated costs to
complete by year.
Costs Incurred
Year
Year 1
Year 2
Year 3
What Gross Profit (Loss) would be recognized in Year 2, assuming that gross profit is recognized over time? Note: Please
round percentages to four digits (e.g., 0.6666).
3,000,000
Est Costs to Complete
6,000,000
4,200,000
1,800,000
1,800,000

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