In 2014, Gurney Construction Company agreed to construct an apartment building at a price of $1,722,000. The information relating to the costs and billings for this contract is shown below.
|
2014
|
2015
|
2016
|
||||
| Costs incurred to date | $405,285 | $751,260 | $1,100,000 | |||
| Estimated costs yet to be incurred | 583,215 | 237,240 | –0– | |||
| Customer billings to date | 303,400 | 856,300 | 1,722,000 | |||
| Collection of billings to date | 260,100 | 708,600 | 1,451,000 |
(a) Assuming that the percentage-of-completion method is used.
(1) compute the amount of gross profit to be recognized in 2014 and 2015.
| Gross profit to be recognized in 2014 |
$
 [removed]706020 |
|
| Gross profit to be recognized in 2015 |
$
[removed]602700 |
(2) prepare journal entries for 2015. (Credit account titles are automatically indented when amount is entered. Do not indent manually. For costs incurred use account Materials, Cash, Payables.)
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