Seasons Construction is constructing an office builidng under contract for Canno

Question

Seasons Construction is constructing an office builidng under contract for Cannonn Company. The contract calls for progress billings and payments of $1,240,000 each quarter. The total contract price is $14,880,000 and Seasons estimates total costs of $14,200,000. Seasons estimates that the building will 3 years to complete, and commences construction on January 2, 2014. At December 31, 2015, Seasons Construction estimates that it is 75% complete with the building; however, the estimate of total costs to be incurred has risen to $14,400,000 due to unanticipated price increases. What is the total amount of Construction Expenses that Seasons will recognize for the year ended December 31.2015? $6,540,000 $10,800,000 $6,300,000 &6,390,000

Explanation / Answer

Amount of Construction expense that seasons will recognize for the year ended December 31, 2015 is $ 6,540,000.

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