Deen Construction began a construction project in 2018. The contract price was $1,250,000, and the estimated costs were $1,000,000. Data for each year of the contract are as follows:

2018 2019 2020

Costs incurred during the year $250,000 $600,000 $190,000

Estimated cost to complete 750,000 212,500 -0-

Partial billings 375,000 500,000 375,000

Collections 187,500 469,000 593,500

Instructions:

1. Assuming Deen the percentage of completion method:

(a) Create a schedule that computes the gross profit for 2018 - 2020.

(b) Determine the net amount for construction in progress inventory should

be reported on the 2018 balance sheet.

(c) Create all the necessary journal entries for 2019.

2. Compute the amount of gross profit to be recognized each year, assuming

the completed contract method is used.

Please help by showing all supporting calculations.