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Kojak Construction manufactures beachfront homes in Florida, often for an average list price of $3 million. When it manufactures a home it typically exhibits the following cost and cash flow activity. Assume that all costs incurred were paid in the same period.
(in $ thousands)
PERIOD RECEIPTS COSTS INCURRED
1 1000 600
2 600 800
3 400 400
4 1000 200
Quetsion 1: Assume that Kojak has signed a contract with a creditworthy customer to build a home and it can estimate its costs. What gross profit should it record in period 3 ?
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