Tuscany Boatbuilders was recently awarded a $17,000,000 contract to construct a luxury liner for Queen Cruiseliners Inc. Tuscany estimates it will take 42 months to complete the contract. The company uses the cost-to-cost method to estimate profits. The following information details the actual and estimated costs for the years 2010–2013.

Instructions:
1. Compute the revenue, cost, and gross profit to be recognized for each of the years 2010–2013 under the percentage-of-completion method.
2. Give the journal entries for each of the years 2010–2013 to record the information from(1).

Actual CostEstimated Cost to Year Current Year Complete 2010 2011 2012 2013 $6,400,000 5,200,000 4,100,000 1,000,000 $8,700,000 4,600,000 1,500,000