Problem 13: Cost Recovery Method of Deferring Gross Profit Similar to Chapter 18: Slides 67-59) In 2016, Denali Manufacturing sells inventory with a cost of $40,000 to Huffmeister Company for $70,000. Huffmeister will make payments of $30,000 in 2016, 528,000 in 2017, and $12,000 in 2018. The cost-recovery method applies to this transaction Al Complete the following schedule for Denali (for 2016 - 2018) 2016 2017 2018 Cash Collected Revenue Cost of Goods Sold Deferred Gross Profit Less: Recognized Gross Profit Deferred Gross Profit Balance B) Record the Journal entries on Claymore's books to record the gross profit for 2017 & 2018: Problem #14: Calculating the Gross Profit on a LT Construction Contract Western Construction Company entered into a contact to build a condominium complex for $42,000,000. Construction began in 2018 and is expected to be completed in 2020. Western uses the percentage-of-completion method. Data for 2018 and 2019 are as follows 2018 2019 Cost Incurred to Date $5,400,000 $15,600,000 Estimated Cost to Complete $21,600,000 $14,400,000 Instructions (a) Calculate the amount of gross profit that should be recognized for 2018 (Show your calculations) b) Calculate the amount of gross profit that should be recognized for 2019 (show your calculations) Problem #1: Percentage of Completion Method (Note: This problem is based on Chapter 18. Slides 46-48) The accounting records of Southern Building Contractors Inc. shows the following data for its major project for the three years ended 2016-2018: 2020 Contract Price Estimated Total Cost of Project: 2018 $1,485,000 $1,320,000 $330,000 $990,000 $297,000 2019 $1,485,000 $1,320,000 $629,200 $360,800 $792,000 $1,485,000 $1,320,000 $360,800 Cost incurred Current Year Estimated Cost to Complete Billings to Customer Current Yr. Cash Receipts from Customer Current Yr. $396,000 $247,500 $577,500 $660,000 Required: Complete the following table, ending with the correct Gross Profit recognized (Note: round your % to two decimal places) 2018 2019 2020 Cost incurred to Date Estimated Cost to Complete Estimated Total Contract Cost Estimated Percent Complete Contract Price Revenue Recognizable Revenue Recognized Prior Year Revenue Recognized Currently Costs incurred Currently Gross Profit Recognized