Manson Construction Corp $\$ 3,300,000$ Costs Incurred $3,150,000$ Collections to Date $2,100,000$ Estimated Costs to Complete

Manson Construction Corp. has consistently used the percentage-of-completion method. In 2020, Manson started work on a $ 10,500,000 construction contract that was completed in 2021. The following information was taken from Manson's 2020 accounting records:
Billings to date..................................... $\$ 3,300,000$
Costs incurred....................................... $3,150,000$
Collections to date................................ $2,100,000$
Estimated costs to complete.................. $6,300,000$
Under the earnings approach, what amount of gross profit should Manson recognize in 2020 on this contract?

A) $ 1,050,000
B) $ 700,000
C) $ 525,000
D) $ 350,000

Correct Answer:

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