2. At the end of 2018, Builders Inc. has one project underway to build a warehouse. The project was begun in early 2017. The contract amount is $50,000,000 and the project is expected to be completed in late 2019. Data on this project are presented below:

Costs incurred in 2017 $8,000,000

Billings in 2017 $6,000,000

Estimated cost to complete at 12/31/17 $32,000,000

Additional costs incurred in 2018 $19,000,000

Billings in 2018 $15,000,000

Estimated cost to complete at 12/31/18 $18,000,000

Required:

1) For the Percentage of Completion Method, prepare the journal entries to record (a) the costs incurred, (b) the billings, and (c) recognition of any revenue or expense for both 2017 and 2018.

2) For the Percentage of Completion Method, present the income statement and balance sheet disclosure that would be required for 2017 and 2018.