Refer to the situation described in BE 5-6. The building was completed during the second year. Construction costs incurred during the second year were $10 million. How much gross profit will the company recognize in the first year and in the second year applying the completed contract method?
In BE 5-6, A construction company entered into a fixed-price contract to build an office building for $20 million. Construction costs incurred during the first year were $6 million and estimated costs to complete at the end of the year were $9 million. How much gross profit will the company recognize in the first year using the percentage-of-completion method? How much revenue will appear in the company's income statement?