3 Samantha Network Consultants. Incorporated uses the percentage-of-completion method to account for its long-term contracts. It uses the cost-to-cost approach to measure progress. During the current year. Samantha signed a contract to develop a computer network for an international accounting firm. Information related to the contract is presented below. Click the icon to view the contract information.) Read the requirements Requirement a. Compute the percentage-of-completion for each year. (Round the percentages to the nearest hundredth percent, X.XX%.) 2016 2017 2015 96 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. Enter the percentages to the nearest hundredth percent, X.XX%. Use parentheses or a minus sign for a loss.) Gross profit recognition 2017 2015 2016 Contract price 96 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 (2) (1 (2 (3) (4) (b) Next record the progress billings in 2015 Account 2015 (b (6) (8) (c) Now record the cash collections in 2015. 2015 (c) Account (9) |(10) (11) (12) (d) Next record the gross profit in 2015. Review your answers in Requirement b. 2015 (d) Account (13) |(14) (15) (16) (e) Now we will record the entries for 2018. Record the construction costs in 2016. Account 2016 (e) (17) (18) |(19) (20) (1) Next record the progress billings in 2016. Account 2016 0 (21) (22) (23) (24) (9) Now record the cash collections in 2016. 2016 (9) Account (25) (26) (27) (28) (h) Next record the gross profit in 2016. Review your answers in Requirement b. Account 2016 (h) (29) (30) (31) (32) ( Now we will record the entries for 2017. Record the construction costs in 2017. 2017 (1) Account (33) (34) (35) (36) 0) Next record the progress billings in 2017. 20170) Account (37) (38) (39) (40) (k) Now record the cash collections in 2017 2017 ) Account (41) (42) (43) (1) Next record the gross profit in 2017. Review your answers in Requirement b. 2017 (1) Account (45) (46) (48) (m) Finally record the entry to close the completed contract in 2017. Account 2017 (m) (49) (50) (51) (52) 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"O" 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 (53) (54) Billings on Construction in Progress (55) (56) (59) (60) (57) (58) 2015 Balance (61) (62) (66) 2015 Balance () (63) (67) (64) ( (68) (65) 2016 Balance (69) 2016 Balance (71) (70) (72) (73) (75) 2017 Balance (77) 2017 Balance (79) (78) (80) Final Balance Final Balance Accounts Receivable (81) (82) (84) (83) 2015 Balance (85) (87) (86) (88) 2016 Balance (89) (90) (91) (92) 2017 Balance (93) (94) Final Balance Requiremente. 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) 1: Data Table $ 640,000 Contract price 2015 2016 185.600 $ 262,400 $ OS 185,600 $ $ $ 2017 90.000 448,000 538.000 $ 185.600 $ 448,000 $ Actual construction costs incurred during the year Construction costs incurred in prior years Cumulative construction costs incurred to date Estimated costs to complete Estimated total costs Progress billings made during the year Cash collections during the year $ s 0 $ 394,400 $ 192,000 580.000 $ 640,000 $ 290,000 $ 320,000 $ 210.000 $ 290,000 $ 538.000 30,000 $ $ 140.000 2: Requirements Compute the percentage-of-completion for each year. b. Compute the gross profit and revenue to be recognized each year of the contract. c. Prepare the journal entries required for each year of the contract. d. Prepare the t-accounts for Construction in Progress, Billings on Construction in Progress, and Accounts Receivable. Determine the net asset (liability) for each year of the contract on December 31. 3 Samantha Network Consultants. Incorporated uses the percentage-of-completion method to account for its long-term contracts. It uses the cost-to-cost approach to measure progress. During the current year. Samantha signed a contract to develop a computer network for an international accounting firm. Information related to the contract is presented below. Click the icon to view the contract information.) Read the requirements Requirement a. Compute the percentage-of-completion for each year. (Round the percentages to the nearest hundredth percent, X.XX%.) 2016 2017 2015 96 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. Enter the percentages to the nearest hundredth percent, X.XX%. Use parentheses or a minus sign for a loss.) Gross profit recognition 2017 2015 2016 Contract price 96 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 (2) (1 (2 (3) (4) (b) Next record the progress billings in 2015 Account 2015 (b (6) (8) (c) Now record the cash collections in 2015. 2015 (c) Account (9) |(10) (11) (12) (d) Next record the gross profit in 2015. Review your answers in Requirement b. 2015 (d) Account (13) |(14) (15) (16) (e) Now we will record the entries for 2018. Record the construction costs in 2016. Account 2016 (e) (17) (18) |(19) (20) (1) Next record the progress billings in 2016. Account 2016 0 (21) (22) (23) (24) (9) Now record the cash collections in 2016. 2016 (9) Account (25) (26) (27) (28) (h) Next record the gross profit in 2016. Review your answers in Requirement b. Account 2016 (h) (29) (30) (31) (32) ( Now we will record the entries for 2017. Record the construction costs in 2017. 2017 (1) Account (33) (34) (35) (36) 0) Next record the progress billings in 2017. 20170) Account (37) (38) (39) (40) (k) Now record the cash collections in 2017 2017 ) Account (41) (42) (43) (1) Next record the gross profit in 2017. Review your answers in Requirement b. 2017 (1) Account (45) (46) (48) (m) Finally record the entry to close the completed contract in 2017. Account 2017 (m) (49) (50) (51) (52) 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"O" 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 (53) (54) Billings on Construction in Progress (55) (56) (59) (60) (57) (58) 2015 Balance (61) (62) (66) 2015 Balance () (63) (67) (64) ( (68) (65) 2016 Balance (69) 2016 Balance (71) (70) (72) (73) (75) 2017 Balance (77) 2017 Balance (79) (78) (80) Final Balance Final Balance Accounts Receivable (81) (82) (84) (83) 2015 Balance (85) (87) (86) (88) 2016 Balance (89) (90) (91) (92) 2017 Balance (93) (94) Final Balance Requiremente. 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) 1: Data Table $ 640,000 Contract price 2015 2016 185.600 $ 262,400 $ OS 185,600 $ $ $ 2017 90.000 448,000 538.000 $ 185.600 $ 448,000 $ Actual construction costs incurred during the year Construction costs incurred in prior years Cumulative construction costs incurred to date Estimated costs to complete Estimated total costs Progress billings made during the year Cash collections during the year $ s 0 $ 394,400 $ 192,000 580.000 $ 640,000 $ 290,000 $ 320,000 $ 210.000 $ 290,000 $ 538.000 30,000 $ $ 140.000 2: Requirements Compute the percentage-of-completion for each year. b. Compute the gross profit and revenue to be recognized each year of the contract. c. Prepare the journal entries required for each year of the contract. d. Prepare the t-accounts for Construction in Progress, Billings on Construction in Progress, and Accounts Receivable. Determine the net asset (liability) for each year of the contract on December 31