Gordo Yachts
at the Beginning of 2019 Gordo Yachts Enters

Gordo Yachts
At the beginning of 2019 Gordo 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 $4,000,000. Completion is scheduled for the end of 2021. Gordo's 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.
$$\begin{array} { | l | c | c | c | } \hline & \underline { 2019 } & \underline { 2020 } & \underline { 2021 } \\\hline \begin{array} { l } \text { Actual costs incurred } \\\text { Eurrent year }\end{array} & \$ 750,000 & \$ 2,250,000 & \$ 775,000 \\\hline \begin{array} { l } \text { actual costs incurred } \\\text { prior years }\end{array} & \underline { - 0 - } & \underline { 750,000 } & \underline { 3,000,000 } \\\hline \begin{array} { l } \text { Cumulative actual costs } \\\text { incurred to date }\end{array} & 750,000 & 3,000,000 & 3,775,000 \\\hline \begin{array} { l } \text { Estimated costs to } \\\text { complete end of year }\end{array} & 2,250,000 & \underline { 750,000 } & \underline { - 0 - } \\\hline \text { Total Costs } & \$ 3,000,000 & \$ 3,750,000 & \$ 3,775,000 \\\hline \text { Billings } & \$ 700,000 & \$ 2,600,000 & \$ 700,000 \\\hline \text { Cash Collections } & 500,000 & 2,000,000 & 1,500,000 \\\hline\end{array}$$
-Refer to Gordo Yachts. Prepare all necessary entries for 2019 assuming the use of the percentage-of-completion method.