Problem #$2$

Bell Company constructs office buildings. Because they can reasonably estimate the costs to

completion, they use the percentage of completion method to record revenue. At the beginning of

$2020,$ they began construction on an office building in downtown Portland that will take them three

years to complete. The contract was for $$48,500,000.$

A$.$ In a spreadsheet, please show all the journal entries to record the activities for all three years.

B$.$ Please show the balance of the construction in progress and billings on construction in progress

for each of the three years. Will they be reported as a net current asset or current liability

recorded on the balance sheet for each year?

C$.$ Please describe in paragraph form how your journal entries would change for all three years if

Bell Company used the completed contract method instead of the percentage of completion

method.