Answer:
estimated loss from the project is $1,000,000
correct option is a. ($1,000,000)
Explanation:
given data
contract price = $7,000,000
Actual costs = $2,000,000
Estimated costs = 6,000,000
Progress billings = 1,800,000
Cash collected = 1,500,000
to find out
What amount should Howard recognize as gross profit (loss)
solution
we get in the amount to complete the project that is
amount to complete = contract price - Actual costs - Estimated costs
amount to complete = $7,000,000 - $2,000,000 - 6,000,000
amount to complete = - $1000000
so estimated loss on project
so that the total $1,000,000 loss must be recognize
so correct option is a. ($1,000,000)
