Completed contract method: This method recognizes gross profit only at the end of the contract, and revenue is recognized each year equivalent to the actual cost incurred, thus reporting zero gross profit until the contract is completed. The journal entries to record construction activity.

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Chapter 8, Problem 8.20BE

To determine

Completed contract method: This method recognizes gross profit only at the end of the contract, and revenue is recognized each year equivalent to the actual cost incurred, thus reporting zero gross profit until the contract is completed.

The journal entries to record construction activity.

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