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Reese Construction Corporation contracted to construct a building for $1,500,000. Construction began in 2007 and was completed in 2008. Data relating...
Reese Construction Corporation contracted to construct a building for $1,500,000. Construction began in 2007 and was completed in 2008. Data relating to the contract are summarized below: Year Ended Dec. 31 2007 2008 Costs incurred $600,000 $450,000 Estimated cost to complete $400,000 -0-Reese uses the percentage-of-completion method as the basis for income recognition. For the years ended December 31, 2007, and 2008, respectively, Reese should report gross profit ofA. $270,000 and $180,000.B. $300,000 and $150,000.C. $900,000 and $600,000.D. $0 and $450,000.