Problem 5—Percentage-of-completion methodDalton Construction Co. contracted to build a bridge for $8,000,000. Construction began in 2014and was completed in 2015. Data relating to the construction are:20142015Costs incurred during the year$2,640,000$2,200,000Estimated costs to complete2,160,000—Dalton uses the percentage-of-completion method.Instructions(a)How much revenue should be reported for 2014? Show your computation.(b)Make the entry to record progress billings of $3,300,000 during 2014.(c)Make the entry to record the revenue and gross profit for 2014.(d)How much gross profit should be reported for 2015? Show your computation.
Problem 6—Percentage-of-completion and completed-contract methodsBeavis Construction Company was the low bidder on a construction project to build an earthen dam for $1,800,000. The project was begun in 2012 and completed in 2013. Cost and other data are presented below:(1) Assume that Beavis uses the percentage-of-completion method for revenue recognition.