Apartment King (AK)is Building a Luxury Condominium for a Contract

Apartment King (AK)is building a luxury condominium for a contract price of $68,000,000. This is estimated to be a three-year project with an estimated cost of $54,000,000. AK uses the percentage of completion method of revenue recognition, using the cost-to-cost method of estimating the percentage complete. The following is the best available information at the end of each year:
$$\begin{array} { | l | r | r | r | } \hline & \text { Year 1 } & \text { Year 2 } & \text { Year 3 } \\\hline \text { Costs incurred each year } & 9,000 & 31,500 & 20,000 \\\hline \text { Estimated costs to complete } & 51,000 & 27,000 & 0 \\\hline \text { Billings } & 13,000 & 29,500 & 25,500 \\\hline \text { Collections } & 9,000 & 26,500 & 32,500 \\\hline\end{array}$$ Required:
a. Calculate the amount of gross profit to be recognized in Year 1, Year 2, and Year 3. Show computations in tabular form provided below.
$$\begin{array} { | l | l | l | l | } \hline & \underline { \text { Year 1 } } & \underline { \text { Year 2 } } & \underline { \text { Year 3 } } \\\hline \text { Cost incurred to date } & & & \\\hline \text { Estimated cost to complete } & & & \\\hline \text { Estimated total cost } & & & \\\hline \text { Contract price } & & & \\\hline \text { Estimated gross profit } & & & \\\hline \text { pr complete } & & & \\\hline \text { Grossprofit to date } & & & \\\hline \text { Gross profit previously recognized } & & & \\\hline \text { Current gross profit } & & & \\\hline\end{array}$$ b. Prepare all the journal entries required in Year 2.
c. Prepare the journal entry required in Year 3 to close the accounts related to the project.
d. At the end of Year 2, if the estimated cost to complete is $28 million (instead of $27 million), how much gross profit would be recognized in Year 2?