Determining amount of construction costs incurred

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Willingham Construction Company uses the percentage-of-completion method. During 2007, the company entered into a fixed-price contract to construct a building for Richman Company for $30,000,000. The following details pertain to the contract: Percentage of completion Estimated total cost of contract Gross profit recognized to date At December 31, 2007 25% $22,500,000 1,875,000 At December 31, 2008 60% $25,000,000 3,000,000 The amount of construction costs incurred during 2008 was

a. $15,000,000

b. $ 9,375,000

c. $ 5,625,000

d. $ 2,500,000

Reference no: EM13141651

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