1. Greg Construction contracted to build a bridge for $2,000,000. Construction began in 20x1 and was completed in 20x2. Data relating to the construction are:

20x1 20x2

Cost incurred $810,000 $700,000 Estimated costs to complete 690,000

Progress billings 700,000

Greg uses the percentage of completion method.

Required:

1. How much revenue should be reported for 20x1? Show your computation.

2. Prepare the journal entries for, construction costs, revenue (and gross profit) and progress billings for 20x1.

3. How much gross profit should be reported for 20x2? Show your computation.

2. Answer each of the following unrelated questions.

1) Bill wants to give Maria a $500,000 gift in seven years. If money is worth 6% compounded semiannually, what is Maria's gift worth today?

2) At the end of each quarter, Patti deposits $500 into an account that pays 12% interest compounded quarterly. How much will Patti have in the account in three years?

*In the following questions, the interest is compounded annually.

3) Spielberg Inc. signed a $200,000 noninterest-bearing note due in five years from a production company eager to do business. Comparable borrowings have carried an 11% interest rate. What is the value of this debt at its inception?