Answer:
Recognize $ 1.50 millions gross profit in 2022
Explanation:
Year end 2021 Year end 2022
A Contract Price $150.00 $150.00
B Cost Incurred to Date $36.00 $94.50
($36 + $58.50)
C Estimated cost yet to be
incurred to complete
the contract $84.00 $0.50
Total Cost $120.00 $135.00
D = B+C
Percentage of Completion 30.00% 70.00%
E = (B ÷ D) × 100
Revenue to date $45.00 $105.00
F = A × E
G Revenue of Previous year $- $45.00
Net Revenue this year $45.00 $60.00
H = F - G
Cost to date $36.00 $94.50
I (=B)
J Cost to date of previous year $- $36.00
Net Cost for the year $36.00 $58.50
K = I - J
Gross Profits $9.00 $1.50
L = H - K
Therefore the correct answer is Recognize $ 1.50 millions gross profit in 2022 hence, option is not available.
