Early in 2012, Forest Ltd

Early in 2012, Forest Ltd. signed a contract to construct a warehouse. Forest's management estimated the gross profit on the contract to be $740,000, as indicated by the following: At the end of 2012, the status of the work on the contract was as follows:
How much revenue can be recognized on this contract for 2012, assuming that Forest uses the
Percentage of completion basis for long-term construction contracts (round to nearest dollar) ?

A) $333,000
B) $863,333
C) $1,575,000
D) $1,711,957

Correct Answer:

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