Long-term Contracts Koolman Construction Company began work on a contract in 2017. The contract price is $3,000,000, and the company determined that its performance obligation was satisfied over time. Other information relating to the contract is as follows: 2017 2018 Costs incurred during the year $ 600,000 $ 700,000 Estimated costs to complete, December 31 1,400,000 1,200,000 Billings during the year 500,000 850,000 Collections during the year 400,000 800,000 Required: 1. Compute the gross profit or loss recognized in 2017 and 2018. KOOLMAN CONSTRUCTION COMPANY Gross Profit / Loss 2017 and 2018 2017 2018 Construction costs incurred to date $ $ Estimated costs to complete Total estimated costs $ $ Percentage completed % % Revenue to date $ $ Revenue recognized in current year $ $ Costs incurred in current year Profit (loss) recognized $ $ 2. Prepare the appropriate sections of the income statement for each year. KOOLMAN CONSTRUCTION COMPANY Partial Income Statement For the Years Ended December 31, 2017 and 2018 2017 2018 Construction revenue $ $ Construction expense Gross profit (loss) $ $ Prepare the appropriate sections of the ending balance sheet for the year 2017. KOOLMAN CONSTRUCTION COMPANY Partial Balance Sheet December 31, 2017 Current Assets: Accounts receivable $ Inventory: Construction in progress $ Less: Partial billings Costs and recognized profit not yet billed Prepare the appropriate sections of the ending balance sheet for 2018. KOOLMAN CONSTRUCTION COMPANY Partial Balance Sheet December 31, 2018 Current Assets: Accounts receivable $ Inventory: Construction in progress $ Less: Partial billings Costs and recognized profit not yet billed