Question: PROBLEM 4 In 2024, Cairo Construction began work on a three-year project to construct a new special collections library. The fixed contract price is

PROBLEM 4 In 2024, Cairo Construction began work on a three-year project to construct a new special collections library. The fixed contract price is $200 million, and Cairo recognizes revenue on this contract over time using a cost-to-cost ratio. At the end of 2024, the following financial statement information summarizes Cairo's results after the first year of the project. INCOME STATEMENT: Gross profit (revenue less expenses) recognized in 2024 BALANCE SHEET: $12,000,000 Accounts receivable (uncollected construction billings) $8,000,000 Construction in progress $60,000,000 Less: Billings on construction ($59,000,000) Construction in progress in excess of billings $1,000,000 Required: A. Assuming Cairo expects an overall profit on its contract, provide the four summary entries that it would have recorded during 2024 related to the contract. (I have provided the account names for the first three journal entries to start you on the correct path.) A.1. Record construction costs: Dr. Construction in progress (CIP) Cr. Cash, materials, A/P, etc. A.2. Bill customers: Dr. Accounts receivable Cr. Billings on CIP A.3. Collect cash from customers: Dr. Cash Cr. Accounts receivable PROBLEM 4 (continued) A.4. Record revenue: 12 B. Based on the information, on 12/31/2024, what are Cairo's estimated remaining costs to complete the library? Estimated remaining costs to complete:

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