Question: Horner Construction Co. uses the percentage-of-completion method. In 2014, Horner began work on a contract for $16,500,000; it was completed in 2015. The following cost

Horner Construction Co. uses the percentage-of-completion method. In 2014, Horner began work on a contract for $16,500,000; it was completed in 2015. The following cost data pertain to this contract: Year ended December 31 2014 2015 Costs incurred during the year $5,850,000 $4,200,000 Estimated costs to complete at the end of year 3,900,000 If the completed-contract method of accounting was used, the amount of gross profit to be recognized for years 2014 and 2015 would be:

2014

2015

$6,750,000.

$6,450,000.

$(300,000).

$6,450,000.

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