At the beginning of 2017 Atlantic Yachts enters into a contract to build a luxury...
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At the beginning of 2017 Atlantic Yachts enters into a contract to build a luxury yacht for a customer that is expected to take three years to complete. The contract price is $12,000,000. Completion is scheduled for the end of 2019. Atlantics year end is December 31. The following is a year by year summary of construction costs incurred and the estimated costs to complete the projects at the end of each year.
2017 2018 2019
Actual costs incurred current year $2,250,000 $6,750,000 $2,325,000
Actual costs incurred prior years -0- $2,250,000 $9,000,000
Cumulative actual costs incurred to date $2,250,000 $9,000,000 $11,325,000
Estimated costs to complete end of year $6,750,000 $2,250,000 -0-
Total Costs $9,000,000 $11,250,000 $11,325,000
Billings $2,100,000 $7,800,000 $2,100,000
Cash Collections $1,500,000 $6,000,000 $4,500,000
Required: Prepare the entries under the completed-contract method for 2017
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