At the beginning of 2025 Spartan Corp enters into a contract to build a luxury yacht...

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At the beginning of 2025 Spartan Corp enters into a contract to build a luxury yacht for a customer that is expected to take three years to complete. The contract price is $4,000,000. Completion is scheduled for the end of 2027. Gordo's year end is December 31. The following is a year-by-year summary of construction costs incurred and the estimated costs to complete the projects at the end of each year. 2025 2026 2027 Actual costs incurred current year $750,000 $2,250,000 $775,000 actual costs incurred prior years -0- 750,000 3,000,000 Cumulative actual costs incurred to date 750,000 3,000,000 3,775,000 Estimated costs to complete end of year 2,250,000 750,000 -0- Total Costs $3,000,000 $3,750,000 $3,775,000 Billings $700,000 Cash Collections 500,000 $2,600,000 2,000,000 $700,000 1,500,000 Required A Assuming that Spartan used the percentage-of-contract-completion method 1. Compute the revenues and gross profits for 2025 and 2026 and 2027. 2. Record all the necessary journal entries for years 2025 to 2027. 3. Prepare partial comparative income statements for years 2025 to 2026, showing revenue from construction projects and construction costs. Prepare partial comparative balance sheets for years 2025 to 2027 showing CP, billings on CP and the net assets (net liabilities). At the beginning of 2025 Spartan Corp enters into a contract to build a luxury yacht for a customer that is expected to take three years to complete. The contract price is $4,000,000. Completion is scheduled for the end of 2027. Gordo's year end is December 31. The following is a year-by-year summary of construction costs incurred and the estimated costs to complete the projects at the end of each year. 2025 2026 2027 Actual costs incurred current year $750,000 $2,250,000 $775,000 actual costs incurred prior years -0- 750,000 3,000,000 Cumulative actual costs incurred to date 750,000 3,000,000 3,775,000 Estimated costs to complete end of year 2,250,000 750,000 -0- Total Costs $3,000,000 $3,750,000 $3,775,000 Billings $700,000 Cash Collections 500,000 $2,600,000 2,000,000 $700,000 1,500,000 Required A Assuming that Spartan used the percentage-of-contract-completion method 1. Compute the revenues and gross profits for 2025 and 2026 and 2027. 2. Record all the necessary journal entries for years 2025 to 2027. 3. Prepare partial comparative income statements for years 2025 to 2026, showing revenue from construction projects and construction costs. Prepare partial comparative balance sheets for years 2025 to 2027 showing CP, billings on CP and the net assets (net liabilities).