The question is also attached.

In the year 2013, the Road Construction Company entered into a contract to construct a road for Athens County for $15,000,000. The road was completed in 2015. Information related to the contract is as follows:

2013 2014 2015

Costs incurred during the year............ $4,000,000 $4,200,000 $7,200,000

Estimated costs to complete as of year-end.......................................... 8,000,000 7,100,000 -

Billings during the year ...................... 3,500,000 5,000,000 6,500,000

Cash collections during the year......... 2,800,000 5,600,000 6,600,000

Road recognizes revenue over time in accounting for long-term construction contracts.

Required:1. Calculate the amount of gross profit or loss to be recognized in each of the three years.

2. Prepare all necessary journal entries for each of the years (credit Cash etc. for construction costs incurred). [Use a landscape formatted page for this solution]

3. Prepare a partial balance sheet for 2013 and 2014 showing any items other than the cash account balance related to the contract.

4. Repeat 1 to 3 above on the assumption that Road recognizes revenue upon completion in accounting for long-term construction contracts.

5. Assuming (a) recognize revenue over time, (b) recognize revenue upon completion, and the same contract price of $15,000,000, calculate the amount of gross profit to be recognized in each of the three years for each revenue recognition method assuming the following costs incurred and costs to complete information:

2013 2014 2015

Costs incurred during the year............ $4,000,000 $4,800,000 $4,200,000

Estimated costs to complete as of year-end.......................................... 8,000,000 4,000,000 -

ACCT 3131 SP 2016 Due April 14. beginning of class Homework - 30 points Individual assignment, TYPED (use Excel) hard copy Instructor: Dr. E. Stewart Points will be lost for poor formatting In the year 2013, the Road Construction Company entered into a contract to construct a road for Athens County for $15,000,000. The road was completed in 2015. Information related to the contract is as follows: 2013 2014 2015 Costs incurred during the year ............ $4,000,000 $4,200,000 $7,200,000 Estimated costs to complete as of year-end.......................................... 8,000,000 7,100,000 Billings during the year ...................... 3,500,000 5,000,000 6,500,000 Cash collections during the year ......... 2,800,000 5,600,000 6,600,000 Road recognizes revenue over time in accounting for long-term construction contracts. Required: 1. Calculate the amount of gross profit or loss to be recognized in each of the three years. 2. Prepare all necessary journal entries for each of the years (credit \"Cash etc.\" for construction costs incurred). [Use a landscape formatted page for this solution] 3. Prepare a partial balance sheet for 2013 and 2014 showing any items other than the cash account balance related to the contract. 4. Repeat 1 to 3 above on the assumption that Road recognizes revenue upon completion in accounting for long-term construction contracts. 5. Assuming (a) recognize revenue over time, (b) recognize revenue upon completion, and the same contract price of $15,000,000, calculate the amount of gross profit to be recognized in each of the three years for each revenue recognition method assuming the following costs incurred and costs to complete information: 2013 2014 2015 Costs incurred during the year ............ $4,000,000 $4,800,000 $4,200,000 Estimated costs to complete as of year-end.......................................... 8,000,000 4,000,000 - Points Distribution Question % 1 12 2 36 3 16 4 24 5a 6 5b 6 100