In the year 2016, the Malinkrodt Construction Company entered into a contract to construct a road for Dade Country for 415,000,000. The road was completed in 2018. Information related to the contract is as follows:

2016 2017 2018

Cost incurred 4000000 4800000 4200000

Estimated Costs to Complete as of Yr end 8000000 4000000

Billings during the Yr 3500000 5000000 6500000

Cash Collections during the YR 2800000 5600000 6600000

Mainkrodt uses the percentage of completion method of accounting for long term construction contracts.

Required:

1. Calculate the amount of revenue and gross profit or gross loss to be recognized in each of the three years.

2. Prepare all necessary journal entries for 2016 only.