The Life of a Construction Contract Is 4 Years

Short Answer

The life of a construction contract is 4 years.The firm used the percentage-of-completion method.Under this method, cash collected and revenues recognized are shown below.Total cost of the project was $800,000.What portion of the total cost was incurred each year?
$\begin{array}{lll}& \text { Cash } & \text { Revenue } & \text { Cost } \\\text { Year } & \text { Collected } & \text { Recognized } & \text { Incurred }\\1&\$ 100,000 & \$ 300,000 & \text { A } \\2&200,000 & 300,000 & \text { B } \\3&200,000 & 150,000 & \text { C }\\4&200,000&250,000&D\\\text { Total. }&\$1,000,000&\$1,000,000&\$800,000\end{array}$