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 $6,000,000. In the first year of the contract Camey incurs $1,400,000 of cost and the engineers determined that the remaining costs to complete are $2,200,000. Camey billed $3,800,000 and collected $1,000,000 in Year 1. Refer to Camey Construction. How should Camey report Construction in Progress and Billings on Construction in Progress 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) asset of $0
B) liability of $1,466,667
C) asset of $1,400,000
D) liability of $3,800,000