Sable Construction entered into a contract beginning on January 1, 2020, to construct an office building for a customer. The sale price of the building was set at $500,000. Sable estimated the building would cost $400,000 to complete, and the project would e completed in three years. The project was completed on December 31, 2022, at which time the building was transferred to the buyer. The following information is available for the entire construction project:

2020 2021 2022

Cost incurred to date $ 150,000 $ 300,000 $ 480,000

Estimated cost to complete $ 200,000 $ 120,000 $ -0-

Progress billings to date $ 250,000 $ 350,000 $ 500,000

Collections to date $ 175,000 $ 325,000 $ 500,000

REQUIRED:

1. Calculate the estimated gross profit (Income or loss) that Sable should recognize on the project during each year of the construction project, using the percentage-of-completion method of accounting.
2. Calculate the estimated gross profit (income or loss) that Sable should recognize on the project during each year of the construction project, using the completed-contract method of accounting.
3. Prepare the journal entries that Sable should record pertaining to this project for the year 2022, using the percentage-of-completion method.