Tullis Construction Enters into a Long-Term Fixed Price Contract to Build

Multiple Choice

Tullis Construction enters into a long-term fixed price contract to build an office tower for $22,000,000. In the first year of the contract, Tullis incurs $9,000,000 of cost and the engineers determined that the remaining costs to complete are $5,000,000. Tullis billed $11,000,000 in year 1 and collected $4,100,000 by the end of the end of the year. Refer to Tullis Construction. How much should Tullis report as Accounts Receivable at the end of year 1 on the balance sheet assuming the use of the percentage-of-completion method? (Do not round intermediary calculations, and round your final answer to the nearest whole dollar.)

A) $6,900,000
B) $3,700,000
C) $4,100,000
D) $20,000,000