P18-4B)

On April 1, 2014, Pinkett Construction Company obtained a contract to build an museum. The museum was to be built at a total cost of $30,000,000 and was scheduled for completion by November 1, 2016. One clause of the contract stated that Pinkett was to deduct $25,000 from the $40,000,000 billing price for each week that completion was delayed. Completion was delayed 4 weeks, which resulted in a $100,000 penalty. Below are the data pertaining to the construction period. Instructions Using the percentage-of-completion method, compute the estimated gross profit recognized in the years 2014-2016. Prepare a partial balance sheet for December 31, 2015, showing the balances in the receivables and inventory accounts. (Completed-Contract and Percentage-of-Completion with Interim Loss) Limerock Custom Builders was established in 1971 by Jon Rock and initially built high-quality customized homes under contract with specific buyers. In the 1990s, Rock's son joined the company and expanded Limerock's activities into industrial and commercial retail markets. Upon the retirement of Limerock's long-time financial manager, Rock's son recently hired Flint, a former college friend, as the new controller for Limerock. Flint, has been associated with a public accounting firm for the last 6 years. Upon reviewing Limerock's accounting practices, Flint observed that Limerock followed the completed-contract method of revenue recognition, a carryover from the years when individual home