During 2014, Nilsen Company started a construction job with a contract price of $1,600,000. The job was completed in 2016. The following information is available.

Instructions
(a) Compute the amount of gross profit to be recognized each year, assuming the percentage-of completion method is used.
(b) Prepare all necessary journal entries for 2015.
(c) Compute the amount of gross profit to be recognized each year, assuming the completed-contract method is used.

Transcribed Image Text:

2016 2014 2015 Costs incurred to date Estimated costs to complete Billings to date Collections to date $400,000 600,000 300,000 $825,000 $1,070,000 -0- 1,600,000 900,000 1,425,000 810,000