In 2004, XYZ Company started a construction project with a contract price of $4,500,000. The job was completed in October 2006. The following information is available. Data: Contract price: $4500000 Start Date: Jul 2004 Balance sheet date: Given: Costs to date 2004 $1,000,000 Estimated costs to complete $3,000,000 December 31st Estimated Cost: $4000000 Finish: October 2006 Progress billings during year $ 900,000 $2,400,000 Cash collected during year $750,000 $1,750,000 Data: Contract price: $4,500,000 Start date: July, 2004 Balance sheet date: Given: Costs to date a) Using the percentage-of completion method, prepare a schedule to calculate the amount of revenue, gross profit to be recorded each year. b) Calculate the amount of gross profit to be recognized each year, assuming the completed-contact method. 2005 $2,916,000 $1,134,000 c) Record the necessary journal entries for the year 2005 under both the percentage-of completion method, and the completed-contact method. d) Assume that the following information is available: December 31 2006 $4,050,000 $-0- 2004 $1,000,000 Estimated costs to complete $3,000,000 Progress billings during year $900,000 Cash collected during year $ 750,000 $1,200,000 $2,000,000 Estimated cost: $4,000,000 Finish: October, 2006 2005 $2,916,000 $1,640,250 $2,400,000 $1,750,000 2006 $4,556,250 $ -0- $1,200,000 $2,000,000 Record the necessary journal entries to record the margin or loss for the year 2005 under both the percentage-of completion method, and the completed-contact method. e) Explain when a journal entry is required during the execution of the contract under the completed contract method for accounting for long term contract?