Question: A construction company entered into a contract to construct a floating bridge across a lake. The contract price for the bridge is $7,500,000. During 2014,

A construction company entered into a contract to construct a floating bridge across a lake. The contract price for the bridge is $7,500,000. During 2014, costs of the $1,500,000 were incurred representing 30% of total expected costs.

Prepare the necessary journal entries for 2014 to recognize gross profit for the year assuming the firm uses the:

1. completed-contract method

2. percentage-of-completion method

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