Question

During 2017, Nilsen Company started a construction job with a contract price of $1,600,000. The job was completed in 2019. The following information is available. 2017 2018 2019 Costs incurred to date $400,000 $825,000 $1,070,000 Estimated costs to complete 600,000 275,000 –0– Billings to date 300,000 900,000 1,600,000 Collections to date 270,000 810,000 1,425,000 Compute the amount of gross profit to be recognized each year, assuming the percentage-of-completion method is used. Gross profit recognized in 2017 $ Gross profit recognized in 2018 $ Gross profit recognized in 2019 $ Prepare all necessary journal entries for 2018. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. For costs incurred use account Materials, Cash, Payables.) Account Titles and Explanation Debit Credit (To record cost of of construction.) (To record progress billings.) (To record collections.) (To recognize revenue.) Compute the amount of gross profit to be recognized each year, assuming the completed-contract method is used. 2017 2018 2019 Gross profit $ $ $

Answer 1