During $2023,$ Lautoka Company started a construction job with a contract price of $$1,850,000.$ The job is expected to be completed in Fall $2025.$ The following information is available. The contract is non$-$cancellable.

$202320242025$

Costs incurred to date $$450,000$ $$850,000$ $$1,250,000$

Estimated costs to complete $650,000350,0000$

Billings to date $($non$-$refundable$)375,000975,0001,850,000$

Collections to date $285,000875,0001,800,000$

Instructions:

$($a$)$ Using the percentage$-$of$-$completion method, calculate the estimated amount of gross profit to be recognized each year of the construction period.

Round the percentage complete to the nearest whole percentage point.

$202320242025$

$($b$)$ Prepare all necessary journal entries for $2024.$

$2024$ Debit Credit

$($c$)$ Show how the Construction contract would be reported on the Statement of Financial Position and the Income Statement for the year ended

December $31,2024$

Lautoka Company.

Income Statement $2024$

Revenue from long$-$term contracts xxxxx

Construction expenses xxxxx

Gross profit xxxxx

SFP $(12/31)2024$

Current assets

Accounts receivable xxxxx

Current liabilities

Contract liability $($net$)$ xxxxx

$($d$)$ Calculate the amount of gross profit to be recognized each year, assuming the completed$-$contract method is used.

Gross profit recognized in:

$202320242025$