Crane Enterprises Ltd. has entered into a contract beginning in February 2020 to build two warehouses for Atlantis Structures Ltd. The contract is a non-cancellable fixed price contract for $9.4 million. The following data pertain to the construction period.

		2020		2021		2022
Costs for the year		$3,285,000		4,015,000		1,800,000
Estimated costs to complete		4,015,000		1,825,000		-0-
Progress billings for the year (non-refundable)		2,960,000		3,440,000		3,000,000
Cash collected for the year		2,605,000		3,490,000		3,305,000

Part 1

Using the percentage-of-completion method, calculate the percent complete for each year of the contract.

		2020		2021		2022
Percent complete		%		%		%

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Part 2

Calculate the amount of the gross profit to be recognized each year of the contract. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

		2020		2021		2022
Gross profit / (loss)		$		$		$

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Part 3

Prepare the journal entries for 2020 and 2021. (Use Materials, Cash, Payables for costs incurred to date.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) For Year 2020:

Account Titles and Explanation	Debit	Credit
(To record cost of construction)
(To record progress billings)
(To record collections)
(To record revenues)
(To record construction expenses)

For Year 2021:

Account Titles and Explanation	Debit	Credit
(To record cost of construction)
(To record progress billings)
(To record collections)
(To record revenues)
(To record construction expenses)

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Part 4

What is the balance in the Contract Asset/Liability account at December 31, 2020 and 2021?

		December 31, 2020		December 31, 2021
Balance in the Contract Asset/Liability account		$		$

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Part 5

Show how the construction contract would be reported on the SFP and the income statement for the year ended December 31, 2021. (List Current assets in order of liquidity. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45))

CRANE ENTERPRISES LTD. Partial Statement of Financial Position December 31, 2021Quarter Ended December 31, 2021Month Ended December 31, 2021
select an opening name for subsection one Current AssetsIntangible AssetsCurrent LiabilitiesLong-term LiabilitiesProperty, Plant and EquipmentShareholders' EquityTotal AssetsTotal Current AssetsTotal Current LiabilitiesTotal LiabilitiesTotal Liabilities and Shareholders' EquityTotal Long-term LiabilitiesTotal Property, Plant and EquipmentTotal Shareholders' Equity
		$

CRANE ENTERPRISES LTD. Partial Income Statement Month Ended December 31, 2021Year Ended December 31, 2021Quarter Ended December 31, 2021
		$
select a summarizing line for the first part DividendsGross Profit / (Loss)ExpensesRevenuesNet Income / (Loss)Total ExpensesOperating ExpensesOther Expenses and LossesTotal RevenuesIncome from Operations		$