Hercules Construction builds large projects such as dams and skyscrapers. Because these projects take a long time to complete, they use the percentage-of-completion method. Project #101 is projected to have $10,000,000 in total costs and has had $7,000,000 in costs so far. The engineers on the project estimate that is actually only 50% complete. If the company records this project as 70% complete based on costs spent, the WIP will be misstated on the Balance Sheet. 

What other account will be misstated on the Income Statement? 

Answer rating: 100% (QA)

If the company records Project 101 as 70 complete based on costs spent while the engineers estimate ... View the full answer