Question6. Long-term contract based on percentage of completion method (32 (4) Prepare journal entry to record gross profit for 2017(6 points) (5) Show at end of 2017 and 2018, what are the balance af CIP ( points) points) lim's Construction Co. has a $85,000,000 contract to build a new football stadium The project began on January 1, 2016 with an expected completion date of October 31, 2018. The following table provides infomation gathered during the construction period. Jim uses the percentage completion method to account for this contract 2016 2017 2018 2016 Construction costs incurred during the year Estimated costs to complete Billings during the year Cash collected duringyear 25,500,000 38,250,000 17,000,000 12,750,000 32,512,500 24862,500 29,750,000 24,852,500 BB CIP Construction costs incurred during the year Gross Profit EB CIP 38,250,000 42,500,000 (1) Prepare journal entry to record gross profit for 2016 (4 points) [2) Prepare all necessary journal entries for 2017 (7 points) (3) Atend of 2016 and 2017, what are the balance af CIP (6 points) BB CIP Construction costs incurred during the year Gross Profit EB CIP g2017, the costs and estimation have changed according to the following table 2016 2017 36,975,000 26,775,000 29,750,000 25,500,000 201 Construction costs incurred duringtheyar Estimated costs to complete Billings during the year Cash collected during year 25,500,000 26,775,000 38,250,000 17,000,000 12,750,000 38,250,000 42,500,000