E18-7 (Recognition of Profit, Percentage-of-Completion) In 2007 Jeff Rouse Construction Company agreed to construct an apartment building at a price of $1,000,000. The information relating to the costs and billings for this contract is shown below. 2007 2008 2009 Costs incurred to date $280,000 $600,000 $ 785,000 Estimated costs yet to be incurred 520,000 200,000 0 Customer billings to date 150,000 400,000 1,000,000 Collection of billings to date 120,000 320,000 940,000 Instructions (a) Assuming that the percentage-of-completion method is used, (1) compute the amount of gross profit to be recognized in 2007 and 2008, and (2) prepare journal entries for 2008. (b) For 2008, show how the details related to this construction contract would be disclosed on the balance sheet and on the income statement