Ivanhoe Construction is constructing an office building under contract for Cannon Company and uses the percentage-of-completion method. The contract calls for progress billings and payments of $900000 each quarter. The total contract price is $17898000 and Ivanhoe estimates total costs of $18100000. Ivanhoe estimates that the building will take 3 years to complete, and commences construction on January 2, 2021. At December 31, 2021, Ivanhoe estimates that it is 30% complete with the construction, based on costs incurred. At December 31, 2022, YellowStone Construction estimates that it is 70% complete with the building; however, the estimate of total costs to be incurred has risen to $18300000 due to unanticipated price increases. What is the total amount of Construction Expenses that Ivanhoe will recognize for the year ended December 31, 2022? $7440600 $7380000 $7300600 $12810000
Ivanhoe Construction is constructing an office building under contract for Cannon Company and uses the percentage-of-completion method. The contract calls for progress billings and payments of $900000 each quarter. The total contract price is $17898000 and Ivanhoe estimates total costs of $18100000. Ivanhoe estimates that the building will take 3 years to complete, and commences construction on January 2, 2021. At December 31, 2021, Ivanhoe estimates that it is 30% complete with the construction, based on costs incurred.
At December 31, 2022, YellowStone Construction estimates that it is 70% complete with the building; however, the estimate of total costs to be incurred has risen to $18300000 due to unanticipated price increases. What is the total amount of Construction Expenses that Ivanhoe will recognize for the year ended December 31, 2022?
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