Black Sea Construction Company has a contract to construct a $6,000,000 oil rig at an...
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Black Sea Construction Company has a contract to construct a $6,000,000 oil rig at an estimated cost of $5,300,000. The contract is to start in July 2017, and the oil rig is to be completed in October 2019. The following data pertain to the construction period.
| 2017 | 2018 | 2019 | |
|---|---|---|---|
| Costs to date | $1,325,000 | $3,720,000 | $6,300,000 |
| Estimated costs to complete | 3,975,000 | 2,480,000 | |
| Progress billings during the year | 1,200,000 | 3,200,000 | 1,600,000 |
| Cash collected during the year | 1,000,000 | 2,340,000 | 2,660,000 |
What amount of gross profit (loss) should Black Sea recognize in 2018 using the percentage-of-completion method?
($900,000)
($295,000)
($200,000)
($375,000)
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