Bigelow Contractors signed a contract to construct a storage facility for RGN Manufacturing, Inc. The fixed- fee contract specifies that the facility is to be completed in three years. Bigelow uses the percentage- of- completion method (cost- to- cost approach) to account for its construction transactions. Information related to this contract is summarized in the table below.

Required
a. Compute the percentage completed for each year.
b. Compute the gross profit and revenue to be recognized each year of the contract.
c. Prepare the journal entries required for each year of the contract.
d. Prepare the t- accounts for Construction in Progress, Billings on Construction in Progress, and Accounts Receivable.
e. Determine the net asset (liability) for each year of the contract on December 31.

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Contract price $2.000.000 2015 2016 2017 Actual construction costs incurred during the year Construction costs incurred in prior years Cumulative construction costs incurred to date Estimated costs to complete Estimated total costs S 900,000 300,000 S 600,000 0 900,000 $1,200,000 S 900,000 $1.200,000 S1,800,000 600,000 400,000 $1,500,000 $1.600,000 $1,800,000 Progress billings made during the year Cash collections during the year 700,000 S 700,000 S 600,000 800,000 S 400,000 S 800,000