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

Multiple Choice

Gleason Construction enters into a long-term fixed price contract to build an office building for $26,000,000. In the first year of the contract, Gleason incurs $6,000,000 of cost and the engineers determined that the remaining costs to complete are $14,000,000. How much revenue should Gleason recognize in Year 1 assuming the use of the zero-gross -profit approach?

A) $6,000,000
B) $26,000,000
C) $0
D) $14,000,000