$ 1,620,000 Contract price 2015 2016 2017 $ 600,000 $ 243,000 $ 517,000 Actual construction costs incurred during the year Construction costs incurred in prior years Cumulative construction costs incurred to date 0 600,000 843,000 600,000 843,000 1,360,000 Estimated costs to complete 281,000 0 400,000 1,000,000 Estimated total costs 1,124,000 1,360,000 Progress billings made during the year 300,000 424,000 896,000 Cash collections during the year 100,000 524,000 996,000 Requirement a. Compute the percentage completed for each year. 2015 2016 2017 Cumulative percent complete % % % Requirement b. Compute the gross profit and revenue to be recognized each year of the contract. Begin by computing the gross profit recognized each year of the contract. (Enter "O" for any zero amounts. Use parentheses or a minus sign for a loss.) Gross profit recognition 2015 2016 2017 Estimated total revenue Cumulative percentage complete % % % Cumulative revenue Revenue recognized in prior years Current year revenue Less: Actual costs Gross profit (loss) recognized in the current year Requirement c. Prepare the journal entries required for each year of the contract. (Record debits first, then credits. Exclude explanations from journal entries.) (a) Begin by recording the construction costs in 2015. Account 2015 (a) (b) Next record the progress billings in 2015. Account 2015 (5) (c) Now record the cash collections in 2015. Account 2015 (c) (d) Next record the gross profit in 2015. Review your answers in Requirement b. Account 2015 (d) (e) Now we will record the entries for 2016. Record the construction costs in 2016. Account 2016 (e) (f) Next record the progress billings in 2016. Account 2016 (f) (g) Now record the cash collections in 2016. Account 2016 (9) (h) Next record the gross profit in 2016. Review your answers in Requirement b. Account 2016 (h) (i) Now we will record the entries for 2017. Record the construction costs in 2017. Account 2017 (i) (j) Next record the progress billings in 2017. Account 2017 () (k) Now record the cash collections in 2017. Account 2017 (k) (1) Next record the gross profit in 2017. Review your answers in Requirement b. Account 2017 (1) (m) Finally record the entry to close the completed contract in 2017. Account 2017 (m) Requirement d. Prepare the t-accounts for Construction in Progress, Billings on Construction in Progress, and Accounts Receivable. (For accounts with a $0 balance at year end enter "0" on the normal balance side of the t-account. Enter any closing entries after the 2017 balance row in the t-account.) Review the journal entries made above. Construction in Progress Billings on Construction in Progress 2015 Balance 2015 Balance 2016 Balance 2016 Balance 2017 Balance 2017 Balance Final Balance Final Balance Accounts Receivable 2015 Balance 2016 Balance 2017 Balance Final Balance Requirement e. Determine the net asset (liability) for each year of the contract on December 31. (Use parentheses or a minus sign for a net liability. If the net amount is "O", enter a 0 in the cell.) 2015 2016 2017 Construction in Progress (Right to Bill) Billings on Construction in Progress (Obligation to Perform) Net Asset (Liability) Choose from any list or enter any number in the input fields and then continue to the next