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Gleason Construction Enters into a Long-Term Fixed Price Contract to Build

Question 108

Multiple Choice

Gleason Construction enters into a long-term fixed price contract to build an office building for $20,000,000.In the first year of the contract,Gleason incurs $6,000,000 of cost and the engineers determined that the remaining costs to complete are $10,000,000.How much revenue should Gleason recognize in Year 1 assuming the use of the zero-gross -profit approach?


A) $0
B) $6,000,000
C) $7,500,000
D) $10,000,000

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