Hayes Construction Corporation contracted to construct a building for $7,500,000. Construction began in 2022 and was completed in 2023. Data relating to the contract are summarized below: Year ended December 31, 2022 2023 Costs incurred $3,000,000 $2,250,000 Estimated costs to complete 2,000,000 0 Hayes uses the percentage-of-completion method as the basis for income recognition. For the years ended December 31, 2022, and 2023, respectively, Hayes should report gross profit of a. $1,350,000 and $900,000. b. $4,500,000 and $3,000,000. c. $1,500,000 and $750,000. d. $0 and $2,2
Hayes Construction Corporation contracted to construct a building for $7,500,000. Construction began in 2022 and was completed in 2023. Data relating to the contract are summarized below: Year ended December 31, 2022 2023 Costs incurred $3,000,000 $2,250,000 Estimated costs to complete 2,000,000 0 Hayes uses the percentage-of-completion method as the basis for income recognition. For the years ended December 31, 2022, and 2023, respectively, Hayes should report gross profit of a. $1,350,000 and $900,000. b. $4,500,000 and $3,000,000. c. $1,500,000 and $750,000. d. $0 and $2,2
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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| Hayes Construction Corporation contracted to construct a building for $7,500,000. Construction began in 2022 and was completed in 2023. Data relating to the contract are summarized below: | ||||||||||
| Year ended | ||||||||||
| December 31, | ||||||||||
| 2022 | 2023 | |||||||||
| Costs incurred | $3,000,000 | $2,250,000 | ||||||||
| Estimated costs to complete | 2,000,000 | 0 | ||||||||
| Hayes uses the percentage-of-completion method as the basis for income recognition. For the years ended December 31, 2022, and 2023, respectively, Hayes should report gross profit of | ||||||||||
| a. | $1,350,000 and $900,000. | |||||||||
| b. | $4,500,000 and $3,000,000. | |||||||||
| c. | $1,500,000 and $750,000. | |||||||||
| d. | $0 and $2,250,000. |
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