Question: (Recognition of Revenue on Long-Term Contract and Entries) Hamilton Construction Company uses the percentage-of-completion method of accounting. In 2014, Hamilton began work under contract #E2-D2, which provided for a contract price of $2,200,000. Other details follow:

                                                                         2014                2015
Costs incurred during the year                              $640,000          $1,425,00

Estimated costs to complete, as of december 32       960,000             -0-

Billings during the year                                          420,000          1,680,000

Collections during the year                                    350,000           1,500,000

(a) What portion of the total contract price would be recognized as revenue in 2014? In 2015?

(b) Assuming the same facts as those above except that Hamilton uses the completed-contract method of accounting, what portion of the total contract price would be recognized as revenue in 2015?

(c) Prepare a complete set of journal entries for 2014 (using the percentage-of-completion method).