Percentage-of-completion method.

Arshdeep Builders contracted to build a high-rise for $35,000,000. Construction began in 2018 and is

expected to be completed in 2020. Data for 2018 and 2019 are:

Costs incurred to date Estimated costs to complete

Arshdeep uses the percentage-of-completion method.

Instructions

2018 $4,500,000 18,000,000

2019 $13,000,000

12,000,000

(a) How much gross profit should be reported for 2018? Show your computation.

(b) How much gross profit should be reported for 2019?

(c) Make the journal entry to record the revenue and gross profit for 2019.