P$17.$ LO$5,6)$ Recognition of Profit on Long$-$Term Contract

$3$ Shanahan Construction Company has entered into a contract beginning January $1,$

$42025,$ to build a parking complex. It is estimated that the complex will take $3$ years to

$5$ construct. Additional information follows.

Estimated cost of complex

Amount to be billed to the purchasing company

$ $600,000$

The following data pertain to the construction period.

Costs to date

Estimated costs to complete

Progress billings to date

Cash collected to date

Instructions

a$.$ Using the percentage$-$of$-$completion method, compute the estimated gross

profit to be recognized during each year of the construction period.

b$.$ Using the completed$-$contract method, compute the estimated gross profit that

would be recognized during each year of the construction period.

NOTE: Enter a formula, a cell reference, or a value $($if you are unable to

reference a cell$),$ into the yellow shaded input cells.

Contract price

$900,000$

b$.$ Gross profit to be recognized: