Question: Carla Vista Construction is constructing an office building under contract for Cannon Company and uses the percentage-of-completion method. The contract calls for progress billings and
Carla Vista Construction is constructing an office building under contract for Cannon Company and uses the percentage-of-completion method. The contract calls for progress billings and payments of $1000000 each quarter. The total contract price is $18060000 and Carla Vista estimates total costs of $17950000. Carla Vista estimates that the building will take 3 years to complete, and commences construction on January 2, 2021. At December 31, 2021, Carla Vista estimates that it is 20% complete with the construction, based on costs incurred. At December 31, 2022, Carla Vista Construction estimates that it is 70% complete with the building; however, the estimate of total costs to be incurred has risen to $18150000 due to unanticipated price increases. What is the total amount of Construction Expenses that Carla Vista will recognize for the year ended December 31,2022 ? $9093000$12705000$8953000$9115000
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