Question: On 2016, JonSnow Inc. entered into a long-term construction contract to build a defense infrastructure in the North border for $420 million. The expected completion

On 2016, JonSnow Inc. entered into a long-term construction contract to build a defense infrastructure in the North border for $420 million. The expected completion date is December 31, 2018. Costs incurred and estimated costs to mmnlete at vear-end for the life of the contract are as follows (\$ in millions): Required: 1. Calculate the percentage of completion for 2016 and 2017. 2. Compute the amount of gross profit or loss to be recognized in 2016,2017 , and 2018 using the percentage-of-completion method. 3. Prepare journal entries for 2016 to record a). construction cost b). gross profit. c). billings. 4. If the company uses revenue recognition upon completion of the contract, how much is the gross profit to be recognized on this contract for 2016, 2017 and 2018

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