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.
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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