For a Construction Contract Where the Company Uses the Percentage

For a construction contract where the company uses the percentage of completion method and there is a change in the estimated total cost of the contract from 12 million to 13 million, the accountant should do the following:

A) Use the average cost of 12.5 million.
B) Compute the percentage completed using the new cost total if the company uses the cost ratio to estimate percentage completed.
C) Use estimated costs determined at the beginning of the contract, not actual costs to date.
D) Use retrospective treatment.

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