Schott Construction is the contractor for a building project for an educational institution. The project was scheduled to be completed over three years from 2018 to 2020. The contracted price was $80 million. The following table provides information relating to this project:

Required:

a. Compute the amount of gross profit to be recognized in each year.

b. Compute the amount of revenue to be recognized in 2019.

c. Prepare all the journal entries required in 2019.

(Amounts in $ millions) Project completion according to budget plan prior to project commencement Costs incurred to date Additional costs to complete, estimated at year-end Billings on construction in progress to-date Cash collected to-date 2018 50% $42 33 38 35 2019 80% $63 21 58 54 2020 100% $81 0 81 81