Tullis Construction enters into a long-term fixed price contract to build an office tower for $10,300,000. In the first year of the contract Tullis incurs $2,200,000 of cost and the engineers determined that the remaining costs to complete the project are $5,800,000. Tullis billed $3,600,000 in year 1 and collected $3,500,000 by the end of the year. How much gross profit should Tullis recognize in Year 1 assuming the use of the percentage-of-completion method? (Round any intermediary percentages to the nearest hundredth percent, and round your final answer to the nearest dollar) A. $2,832,500 B. $0 C. $5,032,500 D. $632,500 13
Tullis Construction enters into a long-term fixed price contract to build an office tower for $10,300,000. In the first year of the contract Tullis incurs $2,200,000 of cost and the engineers determined that the remaining costs to complete the project are $5,800,000. Tullis billed $3,600,000 in year 1 and collected $3,500,000 by the end of the year. How much gross profit should Tullis recognize in Year 1 assuming the use of the percentage-of-completion method? (Round any intermediary percentages to the nearest hundredth percent, and round your final answer to the nearest dollar) A. $2,832,500 B. $0 C. $5,032,500 D. $632,500 13
Chapter3: Income Sources
Section: Chapter Questions
Problem 88P
Related questions
Question
![Tullis Construction enters into a long-term fixed price contract to build an office tower for $10,300,000. In the first year of the contract Tullis incurs $2,200,000 of cost and the engineers determined that the
remaining costs to complete the project are $5,800,000. Tullis billed $3,600,000 in year 1 and collected $3,500,000 by the end of the year. How much gross profit should Tullis recognize in Year 1 assuming the
use of the percentage-of-completion method? (Round any intermediary percentages to the nearest hundredth percent, and round your final answer to the nearest dollar)
A. $2,832,500
B. $0
C. $5,032,500
D. $632,500
13](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F87f377c8-556b-40c3-ad73-583aac17d9d0%2F8770f048-a078-417e-af62-7cc9804e5626%2Fgm0loh_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Tullis Construction enters into a long-term fixed price contract to build an office tower for $10,300,000. In the first year of the contract Tullis incurs $2,200,000 of cost and the engineers determined that the
remaining costs to complete the project are $5,800,000. Tullis billed $3,600,000 in year 1 and collected $3,500,000 by the end of the year. How much gross profit should Tullis recognize in Year 1 assuming the
use of the percentage-of-completion method? (Round any intermediary percentages to the nearest hundredth percent, and round your final answer to the nearest dollar)
A. $2,832,500
B. $0
C. $5,032,500
D. $632,500
13
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