Part a ( 18 minutes 12 marks)

In January 2021, Dykin Construction Corp. contracted to construct a building for $5,500,000. Construction started in early 2021 and was completed in 2022. The following additional information is available:

2021 2022

Costs incurred to date............................ $2,450,500 $4,650,000

Estimated costs to complete................... 2,300,000

Amount billed customer......................... 2,900,000 2,600,000

Collections during the year..................... 2,450,000 2,800,000

Dykin uses the percentage-of-completion method.

Instructions

How much revenue should Dykin report for 2021 and 2022?

How much Gross Profit should Dykin recognize in 2021 and 2022?

Prepare the revenue and expense entries for 2022. Other entries are not required.