Hardhat Construction Company has entered into a contract beginning January 1, 2016 to build a parking complex. It was originally estimated that the complex will cost $700,000 and will take three years to construct. The complex will be billed to the purchasing company at $950,000. Cost overruns will be paid for by Hardhat Construction Company. The following data pertain to what actually happened during the three year construction period.

2016 2017 2018

Costs to date $350,000 $497,000 $710,000

Estimated costs to complete 350,000 213,000 ---

Progress billings to date 300,000 650,000 950,000

Cash collected to date 250,000 600,000 950,000

Note that the to date amounts in the above table cumulate as you move from period to period so you will need to do some subtraction if you are looking for a yearly amount.

A. Using the percentage-of-completion method, compute the estimated gross profit that would be recognized during each year of the construction period.

B. Show the general journal entries that Hardhat would make in 2017 ONLY