6) Under the percentage-of-completion method, how should earned but unbilled revenues on a long-term contract be disclosed on the statement of financial position?

1. As construction in process in the noncurrent asset section.
2. As a receivable in the noncurrent asset section.
3. As construction in process in the current asset section.
4. In a note to the financial statements until the customer is formally billed for the portion of work completed.

1. Folk Construction Corp. began operations in 2020. Construction activity for 2020 is shown below. Folk uses the completed-contract method.

   Contract	Contract Price	Billings Through 12/31/20	Collections Through 12/31/20	Costs to 12/31/20	Estimated Costs to Complete
   1	$ 1,280,000	$ 1,260,000	$ 1,040,000	$ 860,000
   2	1,440,000	600,000	400,000	328,000	$ 752,000
   3	1,320,000	760,000	700,000	900,000	480,000

   Which of the following should be shown on the income statement for 2020 related to Contract 1?

   		gross profit, $ 180,000
   		gross profit, $ 420,000
   		gross profit, $ 400,000
   		gross profit, $ 240,000