Mobey Construction Corp $\text {Costs incurred} \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \$877,500 \quad \$630,000$

Short Answer

Mobey Construction Corp. uses the percentage-of-completion method. In 2020, Mobey began work on a contract for $ 2,475,000 which was completed in 2021. Data on the costs are: $\quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \text{Year Ended December 31}$
$\quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad \underline{2020} \quad \quad \quad \underline{2021}$
$\text {Costs incurred} \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \$877,500 \quad \$630,000$
$\text{Estimated costs to complete}\ldots \ldots \ldots \ldots \ldots \ldots \ldots 585,000 \quad\underline{-}$
For the calendar years 2020 and 2021, Mobey should recognize gross profit of

$\quad \underline{2020}\quad \quad \quad \quad \underline{2021}$
a) $\$0 \quad \quad \quad \quad \$967,500$
b) $\$ 580,500 \quad \$ 387,000$
c) $\$ 607,500 \quad \$ 360,000$
d) $\$ 607,500 \quad \$ 967,500$