Hometown Construction Corp. entered into a long$-$term contract to build an office

building for Outsider Corp. at a fixed contract price of $$27\mathrm{.}5$ million on $6/15/2016.$

Construction of the building is completed on $12/15/2018.$ Hometown Construction

expects the building to be completed in two and a half years and uses the Percentage of

Completion Method $($cost to cost approach$)$ to account for the contract. Cost information

related to the contract are as follows:

$201620172018$

Actual Construction costs incurred

during year $4,500,00012,075,0009,425,000$

Estimated costs to complete at $12/3120,500,0008,925,0000$

A$.$ Determine the amount of Gross Profit that would be recognized each year under

Percentage of Completion.

B$.$ What amount of Gross Profit would be recognized in $2017$ if the estimated costs

to complete were $$11,000,000?$

C$.$ What would be the amount of Gross Profit recognized each year if the completed

Contract Method were used instead?

$2.$ Complete Problem $9-7,$ p $472.$

All parts, for part e$,$ only record transactions related to the account balance that

was written off.