Reference no: EM132787194

In 20x1, Chili Peppers Co. started work on three contracts. Information of the contracts is shown below:

Contract 1 Transaction price - 500,000 Costs incurred - 375,000 Estimated costs to complete - 0
Contract 2 Transaction price -700,000 Costs incurred - 100,000 Estimated costs to complete - 400,000
Contract 3 Transaction price - 250,000 Costs incurred - 100,000 Estimated costs to complete - 100,000

• The performance obligations of Chili Peppers Co. in all of the contracts are satisfied at a point in time (i.e., upon completion).

Problem 1: How much is the total revenue recognized from the contracts in 20x2?

a. 700,000
b. 575,000
c. 500,000
d. 0