Problem 6-09 (Part Level Submission) Pharoah Construction Inc., which has a calendar year end, has entered into a non-cancellable fixed price contract for $2.7 million beginning September 1, 2020, to build a road for a municipality. It has been estimated that the road construction will be complete by June 2022. The following data pertain to the construction period. Costs to date Estimated costs to complete Progress billings to date (non-refundable) Cash collected to date 2020 $776,000 1,649,000 848,000 676,000 2021 2022 $1,642,800 $2,264,000 577,200 0 2,214,000 2,700,000 2,077,000 2,700,000 (a) Your answer is correct. Using the percentage-of-completion method, calculate the estimated gross profit that would be recognized during each year of the construction period. (Enter negative amounts using either a negative sign preceding the number e.g.-45 or parentheses e.g. (45).) 2020 2021 2022 Gross profit/ (loss) 88000 267200 80800 SHOW LIST OF ACCOUNTS SHOW SOLUTION LINK TO TEXT LINK TO TEXT Attempts: 1 of 6 used (b) Your answer is partially correct. Try again. Using the percentage-of-completion method, prepare the journal entries for 2020 and 2021. (Use Materials, Cash, Payables for costs incurred to date.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.) For Year 2020: Account Titles and Explanation Debit Credit Contract Asset/Liability 776000 776000 Materials, Cash, Payabl (To record cost of construction) Accounts Receivable 848,000 848,000 Contract Asset/Liability (To record progress billings) Cash 676,000 Cash 676,000 676,000 Accounts Receivable (To record collections) Contract Asset/Liability 267200 267200 Revenue from Long-Ter (To record revenues) Construction Expenses 776,000 776,000 Contract Asset/Liability (To record construction expenses) For Year 2021 Account Titles and Explanation Debit Credit Contract Asset/Liability 1,642,800 1,642,800 Materials, Cash, Payabl (To record cost of construction) Accounts Receivable 2,214,000 Contract Asset/Liability 2,214,000 (To record progress billings) Cash 2,077,000 Accounts Receivable 2,077,000 (To record collections) Contract Asset/Liability Revenue from Long-Term (To record revenues) Construction Expenses 1,642,800 1,642,800 Contract Asset/Liability (To record construction expenses)