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What the profit that jerry can recognize as having been earn

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Jerry's Engineering has a three-year contract to construct a large piece of capital equipment for its client. The contract price is $4 million. At the end of the first financial year of the project, material, labour, and overheads charged to the job totalled $850,000. Jerry estimates that a further $2.65 million will be required to complete the job. An independent evaluation has certified the value of the work completed as $850,000, which the client has paid under the contract as a progress payment.

Problem 1: The profit that Jerry can recognize as having been earned in the current year is

Select one:

a. None of the above
b. $500,000
c. $121,500
d. $331,250

Reference no: EM132747329

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