On January 1, 2010, Builder Associates entered into a

$1,000,000 long-term, fixed-price contract to construct a factory building for Manufacturing Company. Builder accounts for this contract under the percentage-of-completion, and estimated costs at completion at the end of each quarter for 2010 were as follows:

Estimated percentage- Estimated costs at Quarter of-completion completion 1 10% $750,000 2* 10% $750,000 3 25% $960,000 4* 25% $960,000

*No work performed in the 2nd and 4th quarters.

What amounts should be reported by Builder as “Income on Construction Contract” in its quarterly income statements based on the above information?

Gain (loss) for the three months ended 3/31/10 6/30/10 9/30/10 12/31/10

a. $0 $0 $0 $10,000

b. $25,000 $0 $(15,000) $0

c. $25,000 $0 $0 $0

d. $25,000 $0 $ 6,000 $0