Question: I have a question regarding the percentage-of-completion . For example, A company wants to make a contract with B constructor. The estimated cost was $900,000,

I have a question regarding the percentage-of-completion.

For example, A company wants to make a contract with B constructor. The estimated cost was $900,000, and the contractor wants to add a margin of 10% on its cost estimate.

On the day of the formed of the contract, the finalized cost was $1,000,000. The small storage room will be finished in 3 years, and each year $95,000, $120,000, $250,000 will be incurred for 3 years.

1. Please recognized the revenue over time with the percentage-of-completion method.

2. Does that margin is necessary for the calculation, and if not, when do I need to use it.

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