Cord Builders, Inc. has consistently used the percentage-of-completion method of accounting for construction-type contracts. During 2005 Cord started work on a $9,000,000 fixed-price construction contract that was completed in 2007. Cord’s accounting records disclosed the following:
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December 31 |
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2005 |
2006 |
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Cumulative contract costs incurred |
$3,900,000 |
$6,300,000 |
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Estimated total cost at completion |
7,800,000 |
8,100,000 |
How much income would Cord have recognized on this contract for the year ended December 31, 2006?
- $100,000
- $300,000
- $600,000
- $700,000