On March 1, 2012, Chance Company entered into a contract to build an apartment building It is estimated that the building will cost $2,000,000 and will take 3 years to complete The contract price was $3,000,000 The following information pertains to the construction period Instructions (a) Compute 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 2014 (c) Prepare a partial balance sheet for December 31, 2013, showing the balances in the receivables and inventory accounts

Question: On March 1, 2012, Chance Company entered into a contract to build an apartment building. It is estimated that the building will cost $2,000,000 and

On March 1, 2012, Chance Company entered into a contract to build an apartment building. It is estimated that the building will cost $2,000,000 and will take 3 years to complete. The contract price was $3,000,000. The following information pertains to the construction period.

On March 1, 2012, Chance Company entered into a contract to build

Instructions
(a) Compute 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 2014.

(c) Prepare a partial balance sheet for December 31, 2013, showing the balances in the receivables and inventory accounts.

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