intermediat accounting

Question 2: (8 marks) Beavis construction company was the low bidder on a construction project to build an earthen dam for $2,000,000. The project was begun in 2016 and completed in 2017. Cost another date are presented below: 2016 2017 - Costs incurred during the year $600,000 $1,000,000 - Estimated costs to complete $ 1,000,000 0 - Billings during the year $500,000 $1,100,000 - Cash collections during year $470,000 $ 1,130,000 Assume that Beavis uses the percentage-of-completion method for revenue recognition, Instructions: 1- Determine the amount of gross profit recognized during 2016. (3 marks) 2. Prepare the necessary summary journal entries for 2016 to account for: a-Construction costs incurred. (1 mark) b- Revenue recognition. (1 mark) c-Contract billings. (1 mark) d- Cash collection. (1 mark) 3- Prepare the journal entry to close the construction accounts. (1 mark)