Schott Construction is the contractor for a building project for an educational institution. The project was scheduled to be completed over three years from 2012 to 2014. 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 2013.
c. Prepare all the journal entries required in 2013.

(Amounts in $ millions) 2014 2012 2013 100% Project completion according to budget plan prior to project commencement 50% 80% Costs incurred to date Additional costs to complete, estimated at year-end Billings on construction in progress $81 $42 33 $63 21 58 81 38 Cash collected 54 35 81 3.