Question 29 (8 points)

In 2013, Thomas Jefferson contracted to build an airplane for $12,000,000. Data relating to the contract are as follows:

($ in thousands)

2013 2014

Costs incurred during the year................................. $2,000 $6,000

Estimated costs to complete as of year-end................ 6,000 -

Billings during the year .......................................... 6,000 6,000

Cash collections during the year............................... 5,000 7,000

Determine the gross profit that Thomas Jefferson should recognize in both 2013 and 2014 using the percentage-of-completion method.