Percentage-Of-Completion Method
Flames Corp $\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\underline{2020}\quad\quad\underline{2021}$ $\text {Costs incurred}\ldots \ldots \ldots \ldots \ldots \ldots \ldots\quad\quad\quad\quad\$1,620,000\quad\$1,400,000$

Essay

Percentage-of-completion method
Flames Corp. contracted to build a bridge for $ 5,000,000. Construction began in 2020 and was completed in 2021. Data relating to the construction are:
$\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\underline{2020}\quad\quad\underline{2021}$

$\text {Costs incurred}\ldots \ldots \ldots \ldots \ldots \ldots \ldots\quad\quad\quad\quad\$1,620,000\quad\$1,400,000$
$\text {Estimated cast to complete} \ldots \ldots \ldots \ldots \ldots \ldots1,380,000\quad\quad -$ Instructions
Using the percentage-of-completion method and the cost-to-cost basis,
a) How much revenue should be reported for 2020? Show your calculation.
b) Prepare the journal entry to record progress billings of $ 1,700,000 during 2020.
c) Prepare the journal entry to record the revenue and gross profit for 2020.
d) How much gross profit should be reported for 2021? Show your calculation.