(LO5,6) (Recognition of Revenue on Long-Term Contract and Entries) Hamilton Construction Company uses the percentage-of-completion method of accounting. In 2017, Hamilton began work under contract #E2-D2, which provided for a contract price of $2,200,000. Other details follow:

2017 2018 Costs incurred during the year $640,000 $1,425,000 Estimated costs to complete, as of December 31 960,000 –0–

Billings during the year 420,000 1,680,000 Collections during the year 350,000 1,500,000 Instructions

(a) What portion of the total contract price would be recognized as revenue in 2017? In 2018?

(b) Assuming the same facts as those above except that Hamilton uses the completed-contract method of accounting, what portion of the total contract price would be recognized as revenue in 2018?

(c) Prepare a complete set of journal entries for 2017 (using the percentage-of-completion method).