${?}^{*}$ BE$6\mathrm{.}36($LO $10,12,14)$ During $2023,$ Darwin Corporation started a construction job with a contract price of $$4\mathrm{.}2$ million. Darwin ran into severe technical difficultie.

construction but managed to complete the job in $2025.$ The contract is non$-$cancellable. Under the terms of the contract, Darwin sends billings as revenues are earned. Billings

are non$-$refundable. The following information is available:

a$.$ Calculate the amount of gross profit that should be recognized each year under the percentage$-$of$-$completion method.

b$.$ Prepare the year$-$end journal entries for $2024$ to record revenues and expenses from the contract, assuming the percentage$-$of$-$completion method is used. Explain the

treatment of the reduction in overall gross profit under the percentage$-$of$-$completion method.

c$.$ Calculate the amount of gross profit or loss that should be recognized each year under the completed$-$contract method. Explain the treatment of losses under the

completed$-$contract method.

$*$BE$6\mathrm{.}37($LO $13)$ Assume the facts given in BE$6\mathrm{.}36$ for Darwin. Calculate the amount of gross profit or loss that should be recognized each year under the zero$-$profit method.

${?}^{*}$ BE$6\mathrm{.}38($LO $12,13,14)$ Assume the facts given in BE$6\mathrm{.}36$ for Darwin. Assume billings for the construction contract were as follows: $2023,$ $$500,000$; $2024,$ $$2$ million; and

$2025,$ $$1\mathrm{.}7$ million. Calculate the balance of the Contract Asset$/$Liability account at the end of each year using $($a$)$ the percentage$-$of$-$completion method and $($b$)$ the zero$-$profit

and completed$-$contract methods.