Exercise 18-36

CheyenneConstruction Company uses the percentage-of-completion method of accounting. In 2017, Cheyenne began work under contract #E2-D2, which provided for a contract price of $2,176,000. Other details follow:

2017 2018

Costs incurred during the year $698,750 $1,448,000

Estimated costs to complete, as of December 31 926,250 -0-

Billings to date 425,000 2,176,000

Collections during the year 355,000 1,508,000

What portion of the total contract price would be recognized as revenue in 2017? In 2018?

Revenue recognized in 2017 $___________

Revenue recognized in 2018 $___________

Provide a complete set of journal entries for 2017 (using the percentage-of-completion method)

-(To record cost of of construction.)

-(To record progress billings.)

-(To record collections.)

-(To recognize revenue.)