Warren Construction Company has consistently used the percentage of completion method of recognizing income. In 2007 Warren started work on a $6,000,000 construction contract, which was completed in 2008. The accounting records disclosed the following data:
|
2007 |
2008 |
|
|
Progress billings |
$2,200,000 |
$3,800,000 |
|
Costs incurred |
1,800,000 |
3,600,000 |
|
Collections |
1,400,000 |
4,600,000 |
|
Estimated cost to complete |
3,600,000 |
— |
How much income should Warren have recognized in 2007?
a. $200,000
b. $220,000
c. $300,000
d. $400,000