Wexler Construction Company has contracted to build an office building. The construction is scheduled to begin on 3/1/22, and the estimated time of completion is 7/1/25. The building cost is estimated to be $20,000,000 and will be billed at $26,000,000. The following data relate to the construction period. Costs to date Estimated cost to complete Progress billings to date Cash collected to date 2022 $6,000,000 14,000,000 4,000,000 3,000,000 2023 2024 $11,000,000 $16,000,000 9,000,000 4,350,000 10,000,000 19,000,000 8,000,000 18,000,000 2025 $20,350,000 -0- 26,000,000 26,000,000 Required: a. Compute the estimated revenue and gross profit for 2022, 2023, 2024 and 2025 assuming that the percentage--of-completion method is used. Prepare the necessary journal entries for XYZ for the years 2024 and 2025. b. C. Show the relevant balance sheet and income statement sections for 2024.

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Contract costing is about tracing particular costs related to a particular contract entered into with the customer. It is one of the forms of job order costing. It is useful in long-term contracts at the most. It is seen that substantial time is required for the completion of the contract which takes different accounting periods. Thus, it is very much helpful for recognizing the costs associated with it and accounting in their specific accounting periods.