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Question - Hansen Construction, Inc., has consistently used the percentage-of-completion method of recognizing income. During 1997 Hansen started work on a $3,000,000 fixed-price construction contract. The accounting records disclosed the following data for the year ended December 31, 1997:
Costs incurred $930,000
Estimated cost to complete 2,170,000
Progress billings 1,100,000
Collections 700,000
How much loss should Hansen have recognized in 1997?
a. $230,000
b. $100,000
c. $30,000
d. $0
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