Upton Company has consistently used the percentage-of-completion method of recognizing income. In 2010, Upton started on an $18,000,000 construction contract that was completed in 2012 . The following information was taken from Upton's 2010 accounting records: Progress billing $ 6,600,000 Costs incurred $ 5,400,000 Collections $ 4,200,000 Estimated costs to complete $10,800,000 What amount of
revenue should Upton recognize on the contract in 2010?
a. $6,000,000
b. $5,400,000
c. $9,000,000
d. $0
A
$5,400,000 / ($5,400,000 + 10,800,000) = 33.3%
33.3% x $18,000,000 = $6,000,000
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