On March 1, 2014 Spieth Company entered into a contract to build an apartment building. It is estimated that the building will cost $2,000,000 and will take 3 years to compete. The contract price was $3,000,000. The following information pertains to the construction period.

2014 2015 2016

Cost to date 270,000 450,000 610,000

Estimated cost to complete 1,400,000 520,0000 0

Progress billing to date 1,050,000 2,000,000 3,000,000

Cash collected to date 950,000 1,950,000 2,850,000

A) Compute the amount of gross profit to be recognized each year, assuming the percentage-of-completion method is used.

B) Prepare all necessary journal entries for 2016

C) Prepare a partial balance sheet for December 31, 2015, showing the balance in the receivables inventory accounts.