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

Multiple Choice

Camey Construction enters into a long-term fixed price contract to build an office building for $9,000,000. In the first year of the contract Camey incurs $1,000,000 of cost and the engineers determined that the remaining costs to complete are $2,100,000. Camey billed $1,700,000 and collected $1,300,000 in Year 1. Refer to Camey Construction. How much should Camey recognize as Accounts Receivable at the end of Year 1 assuming the use of the percentage-of-completion method?

A) $700,000
B) $400,000
C) $1,000,000
D) $1,700,000