Reference no: EM132787192

In 20x1, Chili Peppers Co. started work on three contracts. Information of the contracts is shown below:

Contract 1 Transaction price - 500,000 Costs incurred - 375,000 Estimated costs to complete - 0
Contract 2 Transaction price -700,000 Costs incurred - 100,000 Estimated costs to complete - 400,000
Contract 3 Transaction price - 250,000 Costs incurred - 100,000 Estimated costs to complete - 100,000

The performance obligations of Chili Peppers Co. in all of the contracts are satisfied over time. Chili Peppers Co. uses the cost-to-cost method to measure its progress in the contracts.

problem 1: How much is the total revenue recognized from the contracts 20x1?

a. 865,000
b. 265,000
c. 385,000
d. 765,000