Measuring income from long-term contracts. On January 1, 2017 assume that Turner Construction Company agreed to construct an observatory for Dartmouth College for $120 million. Dartmouth college must pay $60 million upon signing and $30 million in 2018 and 2019. Expected construction costs are $10 million for 2017, $60 million for 2018, and $30 million for 2019

REQUIRED:

a.) Indicate the amount and nature of income (revenue and expense) that Turner would recognize during 2017, 2018, and 2019 if it uses the completed-contract method. Ignore income taxes.

b.) Repeat requirement a using the percentage-of-completion method

c.) Indicate the balance in the Construction in Process account on December 31, 2017, 2018, and 2019, (just prior to completion of the contract) under the completed-contract and the percentage-of-completion methods.