Playtime Corporation
Assume That Playtime Corp If Playtime Uses the Percentage of Completion to Recognize Revenue

Multiple Choice

Playtime Corporation
Assume that Playtime Corp. has agreed to construct a new playground for SurreyCounty for $2,450,000. Construction of the new playground will begin on March 17, 2012 and is expected to be completed in August 2013. At the signing of the contract Playtime Corp. estimates that the it will cost $1,750,000 to build the playground
-At the end of 2012 Funtime provided the following information about the project: $$\begin{array} { l l l } & \text { Costs incurred } &\text { Estimuted rast } \\\underline{\text { Year }} & \underline{\text { to dnte } }&\underline{ \text { remainine } }\\2012 & \$ 1,200,000 & \$ 600000\end{array}$$
If Playtime uses the percentage of completion to recognize revenue on the long-term contract how much gross margin should Playtime recognize in 2012?

A) $389,200
B) $278,000
C) $556,000
D) $433,550