On March 1, 2020, Pechstein Construction Company contracted to construct a factory building for Fabrik Manufacturing, Inc. for a total of contract price of $8,400,000. The building was completed by October 31, 2022. The annual contract costs incurred, estimated costs to complete the contract, accumulated billings to Fabrik, and cash collections from Fabrik for 2020, 2021 and 2022 are given below.

2020 2021 2022

Contract costs during the year $2,880,000 $2,230,000 $2,190,000

Estimated costs to complete 3,520,000 2,190,000 -0-

Billings to Fabrik during the year 3,200,000 3,500,000 1,700,000

Cash collected during the year 3,000,000 3,400,000 1,600,000

A. Using the percentage-of-completion method, prepare the journal entry to recognize revenue and gross profit/loss for all three years.

B. Using the percentage -of-completion method, prepare the other three journal entries for 2021 and 2022.

C. Using the percentage-of-completion method, prepare the journal entry Pechstein would make at the end of 2022 to close out the contract.

D. Using the complete contract method, show how much profit or loss from this contract would be reported for the years 2020, 2021, and 2022.