Problem - Crockett Construction Company contracted to build a stadium that will take 3 years to complete. Crockett has agreed to a contract price of $21,000,000, estimated total contract costs of $1,500,000, and expects a gross profit of $6,000,000. The table below shows information related to the contract.

                                                                     2017                2018               2019

Construction costs incurred during the year       $3,000,000       $5,580,000      $9,420,000

Estimated costs to complete the contract           12,000,000       7,920,000                      0

Partial billings to customer                                2,400,000        10,500,000      8,100,000

Collections from customer                                1,500,000        9,900,000        9,600,000

Total contract price, $21,000,000

Requirements:

1. Prepare a gross profit table for the entire contract period, assuming the contract meets the criteria for revenue recognition over time.

2. Prepare journal entries related to the contract for years 2017-2019.

3. Prepare income statements for each year of the contract period.

4. Prepare balance sheets related to the contract for 2017 and 2018.