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Apple Co. began a construction project in 2018 at a total contract price of $150...

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Accounting

Apple Co. began a construction project in 2018 at a total contract price of $150 million. The project is scheduled for completion by 2020. During 2018, Apple incurred $36 million of costs and estimates an additional $84 million of costs to complete the project. In 2019, Apple incurred costs of $58.5 million and estimated an additional $40.5 million in costs to complete the project. Apple recognizes revenue on all contracts over time, as the project is being completed by using the cost to cost approach.

In their 2018 income statement, Apple would:

A) Recognized no gross profit or loss on the project.

B) Recognized a $6 million loss on the project.

C) Recognized $9 million gross profit on the project.

D) Recognized $36 million loss on the project.

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