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How much will ajax recognize as revenue in year two

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Ajax company agrees to construct a road for $5 million over 3 years. The company estimates costs as follows: Year 1, $1.5 million; Year 2, $2.0 million; and year 3, $500,000. Year 1, and 3 go according to plan, but year 2 has a cost overrun of $200,000 over and above projected costs.

Question 1: Using the cumulative degree of completion method, how much will Ajax recognize as revenue in year 2?

Reference no: EM132512356

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