Long Construction Company uses the percentage-of-completion method of accounting for long-term construction contracts. During 2021, Long began work on a $400 million fixed-fee construction contract, which was completed in 2024. Cost incurred and estimated costs to complete at year-end for the life of the contract are as follows ($ in millions):
Cost Incurred
Estimated Costs to Complete as of December 31
2021
$60
$240
2022
$84
$176
For the year 2022, Long should have recognized gross profit on this contract of:
a.$20 million.
b.$18 million.
c.$16 million.
d.$14 million.
