The Lao Construction Company recognizes revenue over time according to percentage of completion for its long-term construction contracts. In 2024, Lao began work on a construction contract. Information on this contract at the end of 2024 is as follows: Cost incurred during the year $ 1,500,000 Estimated additional cost to complete 6,000,000 Gross profit recognized in 2024 250,000 What is the contract price (total revenue) on this contract?

Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter17: Advanced Issues In Revenue Recognition
Section: Chapter Questions
Problem 19RE
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The Lao Construction Company recognizes revenue over time according to percentage of completion for its long-term construction contracts. In 2024, Lao began work on a construction contract. Information on this contract at the end of 2024 is as follows:

Cost incurred during the year $ 1,500,000
Estimated additional cost to complete 6,000,000
Gross profit recognized in 2024 250,000

What is the contract price (total revenue) on this contract?

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