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Question - Cord Builders, Inc. has consistently used the percentage-of-completion method of accounting for construction-type contracts. During 1991 Cord started work on a $9,000,000 fixed-price construction contract that was completed in 1993. Cord's accounting records disclosed the following:
DECEMBER 31, 1991 1992
Cumulative contract costs incurred $3,900,000 $6,300,000
Estimated total costs at completion 7,800,000 8,100,000
How much income would Cord have recognized on this contract for the year ended December 31, 1992?
a. $100,000
b. $300,000
c. $600,000
d. $700,000
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