Question - In 2017 the city of Bree hired Butterbur Construction Company to replace a bridge over the Brandywine River for $10,000,000. The contract qualifies for revenue recognition over time. Information related to the contract and the project is as follows:
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2017
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2018
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2019
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Construction costs incurred during the year
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$2,400,000
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$3,800,000
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$3,900,000
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Estimated cost to complete at 12/31
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5,600,000
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4,100,000
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-0-
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Billings during the year
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2,000,000
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4,000,000
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4,000,000
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Cash collections during the year
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1,600,000
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3,700,000
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4,700,000
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Required -
A. How much revenue should Butterbur recognize in 2017?
B. What gross profit (loss) - if any - does Butterbur recognize on this contract in 2017?
C. How much revenue should Butterbur recognize in 2018?
D. What gross profit (loss) - if any - does Butterbur recognize on this contract in 2018?
E. How much revenue should Butterbur recognize in 2019?
F. What gross profit (loss) - if any - does Butterbur recognize on this contract in 2019?
G. Show all journal entries related to this project for 2017, 2018, and 2019. Use "Various payables for the actual construction cost entries. You may ignore dates and journal entry descriptions.