During 2017, Nilsen Company started a construction job with a contract price of $1,600,000. The job was completed in 2019. The following information is available. The contract is non-cancellable.

Instructions:
(a) Calculate the amount of gross profit to be recognized each year, assuming the percentage-of-completion method is used.
(b) Prepare all necessary journal entries for 2018.
(c) Calculate the amount of gross profit to be recognized each year, assuming the completed-contract method is used.

Transcribed Image Text:

2017 2018 2019 S 400,000 S Costs incurred to date Estimated costs to complete Bilings to date (non-refundable) Collections to date 600,000 300,000 270,000 825,000 S 1,070,000 275,000 900,000 810,000 1,600,000 1,425,000