Question 3

Beanstalk Corp. accepts a contract to build a customized manufacturing machine for Jack on January 1, 2015. The machine is very complex, and the contract includes one year of training and support for Jack. The agreed contract price for both construction and training/support is $50 million.

Beanstalk has a few competitors who could also provide training and support, and would generally charge $5 million for the service.

Costs incurred by Beanstalk over the construction period from 2015 to 2017 were as follows:

Year Ended December 31,	Annual Costs Incurred	Estimated Costs to Complete	Annual Billings	Annual Cash Receipts
2015	15 million	23 million	16 million	15 million
2016	15 million	17 million	13 million	14 million
2017	18 million	0	21 million	21 million

The $21 million billed and received in 2017 includes $5 million for training and support on the machine to begin once the asset is in place on January 1, 2018 and concluding on December 31 that same year. Ignore any possible present value of money issues. All cash receipts were delivered on December 31 of the applicable year. Please complete the schedule of gross profits every year.