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A construction company entered into a fixed-price contract to build an office building for $10 million. Construction costs incurred during the first year were $2 million and estimated costs to complete at the end of the year were $3 million. The company recognizes revenue over time according to percentage of completion.
Required:
How much revenue and gross profit or loss will the company recognize in the first and second year if it recognizes revenue upon contract completion?
Answers: 3
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A construction company entered into a fixed-price contract to build an office building for $10 milli...
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