Reference no: EM132940161

Billie Corporation is executing a construction project, which is expected to take 3 years. The entity has signed a fixed price contract for $12,000,000. The details of the costs incurred to date 2020 are as follows:

Site labor costs - 1,000,000
Costs of construction material - 3,000,000
Depreciation of PPE used in construction - 500,000
Marketing and selling costs - 1,000,000
Total - 5,000,000
Total contract costs estimated to complete - 5,500,000

Problem 1: How much is the revenue, costs and profits to be recognized overtime in 2020?

REVENUE, COSTS, GROSS PROFIT/(LOSS)
A. 5,400,000, 4,500,000, 900,000
B. 5,400,000, 5,500,000, (100,000)
C. 6,000,000, 4,500,000, 1,500,000
D. 6,000,000, 5,500,000, 900,000