EXERCISE 18-4 (Continued)

(b)   Construction in Process.......................................      535,000              ($935,000 – $400,000)                    Materials, Cash, Payables, etc..................                           535,000         Accounts Receivable ($900,000 – $300,000)....      600,000                 Billings and Construction in Process........                           600,000
        Cash ($810,000 – $270,000)..................................      540,000                 Accounts Receivable.....................................                           540,000
        Construction Expenses........................................      535,000         Construction in Process.......................................                           140,000                 Revenue from Long-term Contracts...........                           675,000*
        *$1,500,000 X (85% – 40%)
(c)   Gross profit recognized in:
2004 2005 2006 Gross profit $ –0– $ –0– $430,000*         *$1,500,000 – $1,070,000