During 2023, Hoang Corporation started a construction job with a contract price of $4.2 million. Hoang ran into severe technical difficulties during construction but managed to complete the job in 2025.
The contract is non-cancellable. Under the terms of the contract, Hoang sends billings as revenues are earned. Billings are non-refundable. The following information is available:
					2023		2024		2025
Costs incurred to date					600000		2100000		4100000
Estimated costs to complete					3150000		2100000		0
Billings for the year					1000000		2000000		1200000
Cash Collections for the year					800000		3000000		400000
Calculate the amount of gross profit that should be recognized each year under the percentage-of-completion method using the schedule outlined in class.
Calculate the amount of gross profit or loss that should be recognized each year under the completed-contract method. Explain the treatment of losses under the completed-contract method.
Prepare the year-end journal entries for 2024 to record revenues and expenses from the contract, and the billings and collections assuming the percentage-of-completion method is used.