Please show all work: Hollywood Construction Company recognizes revenue over time according to...
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Accounting
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Hollywood Construction Company recognizes revenue over time according to percentage of completion for its long-term construction contracts. During 2024, Hollywood began work on a $3,000,000 fixed-fee construction contract, which was completed in 2027. The accounting records disclosed the following data at year-end:
Cumulative contract costs incurred
Estimated costs to complete at end of year
2024
$ 200,000
$ 1,800,000
2025
1,100,000
1,100,000
2026
2,000,000
400,000
For the 2026 year, Hollywood should have recognized gross profit on this contract of:
Multiple Choice
$500,000
$225,000
$100,000
$266,667
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