On December 31, 2017, Tri-State Construction Inc. signs a contract with the state of West Virginia Department New River. State anticipates the construction will take of Transportation to manufacture a bridge over the three years. The company's accountants provide the following contract details relating to the project:
Contract price $780 million
Estimated construction costs $600 million
Estimated total profit $180 million
During the three-year construction period, Tri-State incurred costs as follows:
2018 S 60 million
2019 $360 million
2020 $180 million
Required:
A. Compute the revenue recognized, construction costs expensed, and income earned for each year 2018, 2019 and 2020 using the cost-to-cost method.