During 2017, Martinez Company started a construction job with acontract price of $1,580,000. The job was completed in 2019. Thefollowing information is available.
| | 2017 | | 2018 | | 2019 |
Costs incurred to date | | $404,000 | | $853,160 | | $1,073,000 |
Estimated costs to complete | | 606,000 | | 254,840 | | –0– |
Billings to date | | 301,000 | | 904,000 | | 1,580,000 |
Collections to date | | 271,000 | | 812,000 | | 1,418,000 |
Instructions:
Complete a chart analyzing the above information showingrevenue, the % of completion every year and the amount of grossprofit to be recognized each year, assuming thepercentage-of-completion method is used.
Prepare all necessary journal entries for 2017, 2018, and2019.
Compute the amount of gross profit to be recognized each year,assuming the completed-contract method is used.
