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The board of directors of Ogle Construction Company is meeting to choose between the completed contract method and the percentage-of-completion method of accounting for long-term contracts in the company's financial statements. You have been engaged to assist Ogle's controller in the preparation of a presentation to be given at the board meeting. The controller provides you with the following information:

1. Ogle commenced doing business on January 1, 2018.

2. Construction activities for the year ended December 31, 2018, were as follows:

Project	Total contact Price	Billings Through 12/31/18	Cash Collections through 12/31/18
A	$500,000	$340,000	$310,000
B	$720,000	$210,000	$210,000

Project	Contract Costs Incurred Through 12/31/18	Estimated additional costs to complete contracts
A	$424,000	$101,000
B	$195,000	$455,000

3. Each contract is with a different customer

4. Any work remaining to be done on the contracts is expected to be completed in 2019

Instructions:

(a) Prepare a schedule by project, computing the amount of income (or loss) before selling, general, and administrative expenses for the year ended December 31, 2018, which would be reported under:

(1) The completed-contract method

(2) The percentage-of-completion method (based on estimated costs)

(B) prepare the journal entry(ies) to record revenue and gross profit on project B (second project) for 2018, assuming that the percentage-of-completion method is used.

(c) indicate the balances that would appear in the balance sheet at December 31, 2018 for the following accounts for project A, assuming that the percentage-of-completion method is used

-accounts receivable

-billings on construction in process

-construction in process

(d) How would the balances in the accounts discussed in part (c) change (if at all) for project B, if the completed-contract method is used?

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