Exercise 18-36

Grouper Construction Company uses the percentage-of-completion method of accounting. In 2017, Grouper began work under contract #E2-D2, which provided for a contract price of $2,156,000. Other details follow:

		2017		2018
Costs incurred during the year		$598,290		$1,421,000
Estimated costs to complete, as of December 31		1,018,710		0
Billings to date		425,000		2,156,000
Collections during the year		357,000		1,497,000

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

Revenue recognized in 2017		$
Revenue recognized in 2018		$

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Assuming the same facts as those above except that Grouper uses the completed-contract method of accounting, what portion of the total contract price would be recognized as revenue in 2018?

Revenue recognized in 2018

$

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Prepare a complete set of journal entries for 2017 (using the percentage-of-completion method). (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. For costs incurred use account Materials, Cash, Payables.)

Account Titles and Explanation	Debit	Credit
(To record cost of of construction.)
(To record progress billings.)
(To record collections.)
(To recognize revenue.)