Use attachment to answer the following If Brierton used percentage-of-completion method to account for this project, what would they have reported as profit in year 2? a) $1.33 millionb) $0c) $1.50 milliond) $0.67 million Brierton Company enters a contract at the beginning of year 1 to build a newfederal courthouse for a price of $16 million. Brierton estimates that total cost ofthe project will be $12 million and will take four years to complete.Costs incurredYear 1Year 2Year 3Year 4$4 million$4 million$2 million$2 millionPayments from federalgovernment$2 million$2 million$6 million$6 million

Under percentage of work completed method, the revenue is recognized based on work completed during…

Use attachment to answer the following If Brierton used percentage-of-completion method to account for this project, what would they have reported as profit in year 2? a) $1.33 million b) $0 c) $1.50 million d) $0.67 million

Use attachment to answer the following If Brierton used percentage-of-completion method to account for this project, what would they have reported as profit in year 2? a) $1.33 million b) $0 c) $1.50 million d) $0.67 million

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

Use attachment to answer the following

If Brierton used percentage-of-completion method to account for this project, what would they have reported as profit in year 2?

a) $1.33 million

b) $0

c) $1.50 million

d) $0.67 million

Brierton Company enters a contract at the beginning of year 1 to build a new
federal courthouse for a price of $16 million. Brierton estimates that total cost of
the project will be $12 million and will take four years to complete.
Costs incurred
Year 1
Year 2
Year 3
Year 4
$4 million
$4 million
$2 million
$2 million
Payments from federal
government
$2 million
$2 million
$6 million
$6 million

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