On May 1 . 2014, Lavender Construction Company entered into a fixed-price contract to construct an apartment building for $3,000,000 . Lavender appropriately accounts for this contract under the percentage-of-completion method. Information relating to the contract is as follows: 2014 2015 At December 31: Percentage of completion ........ 20% 60% Estimated costs at completion ... $2,250,000
$2,400,000 Income recognized (cumulative) .. $ 150,000 $ 360,000 What is the amount of contract costs incurred during the year ended December 31 . 2015?
a. $600,000
b. $960,000
c. $990,000
d. $1,440,000
C
Business
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