Ivanhoe Construction Company uses the percentage-of-completion method of accounting. In 2021, Ivanhoe began work on...
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Accounting
Ivanhoe Construction Company uses the percentage-of-completion method of accounting. In 2021, Ivanhoe began work on a contract it had received which provided for a contract price of $27500000. Other details follow in 2021:
Costs incurred during the year $14000000
Estimated costs to complete as of December 31 8000000
Billings during the year 11500000
Collections during the year 8500000
What should be the gross profit recognized in 2021?
$13500000
$3500000
$1166667
$5500000
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