A construction company entered into a fixed-price contract

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A construction company entered into a fixed-price contract to build an office building for $38 million. Construction costs incurred during the first year were $12 million and estimated costs to complete at the end of the year were $18 million.

How much gross profit will the company recognize in the first year using the percentage-of-completion method? (Enter your answer in whole dollars.)

How much revenue will appear in the company’s income statement in the first year using the percentage-of-completion method? (Enter your answer in whole dollars.)

A construction company entered into a fixed-price contract to build an office building for $50 million. Construction costs incurred during the first year were $18 million and estimated costs to complete at the end of the year were $27 million. During the first year the company billed its customer $19 million, of which $13 million was collected before year-end.

What would appear in the year-end balance sheet related to this contract using Percentage-of-completion method? (Enter your answers in whole dollars.)

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