Splish Construction Company began operations on January 1, 2017. During the year, Splish Construction entered into a contract with Lundquist Corp. to construct a manufacturing facility. At that time, Splish estimated that it would take 5 years to complete the facility at a total cost of $4,495,000. The total contract price for construction of the facility is $6,038,000. During the year, Splish incurred $1,190,640in construction costs related to the construction project. The estimated cost to complete the contract is $4,221,360. Lundquist Corp. was billed and paid25% of the contract price.

Compute the amount of gross profit to be recognized for the year ended December 31, 2017, and the amount to be shown as "costs and recognized profit in excess of billings" or "billings in excess of costs and recognized profit" at December 31, 2017, under each of the following methods.

(a) Completed-contract method (partially solved - see image labeled Exercise 18-37(a))

Gross Profit to be Recognized: 0

Computing Billings on Uncompleted Contract in Excess of Related Costs Under Completed-Contract Method.

Construction Costs During the Year: 1,190,640

Partial Billings on Contract: ?

(318,860) - Correct.

Attempted: 1,509,500

(b)Percentage-of-completion method (partially solved - see image labeled Exercise 18-37(b))

?

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