Chapter 18, Problem 34E

To determine

Revenue recognition: Revenue recognition is an accounting principle that decides the process of determining and accounting for revenue. Revenue on any transaction is recognized on the performance of the obligation.

Contract: It is a voluntary arrangement that is enforced by the law between two or more parties as a legal binding agreement.

Percentage-of-completion method: The percentage-of-completion method is the method which indicates the income and the expenses for longer term contracts. These are recorded as and when the percentage of the work is completed.

To determine the amount of gross profit.

Given information: All the related information is available in the question document.