Daisy Company is a large commercial real estate contractor that reports its income by the percentage of completion method. In 2019, the company entered into a contract to construct a building for $960,000. Daisy estimated that the cost of constructing the building would be $720,000. In 2019, the company incurred $240,000 in costs under the contract. In 2020, the company incurred an additional $450,000 in costs to complete the contract. The company's marginal tax rate in all years was 35%. Which of the following statements is true? a. Camelia is not required to report any income from the contract until 2018 when the contract is completed.
b. Camelia should amend its 2017 tax return to decrease the profit on the contract for that year.
c. Camelia must report $300,000 of income in 2017.
d. Camelia must recognize $75,000 of income in 2017.
e. None of these choices are correct.