Long Term Construction Contracts The Fender Construction Company receives a contract to build a building over a period of three years for a price of $700,000. Information relating to the performance of the contract is summarized as follows:
|
2007 |
2008 |
2009 |
|
|
Construction costs incurred during the year |
$150,000 |
$242,000 |
$168,000 |
|
Estimated costs to complete |
350,000 |
168,000 |
— |
|
Billings during the year |
120,000 |
250,000 |
330,000 |
|
Collections during the year |
100,000 |
260,000 |
340,000 |
Required
Prepare journal entries for all three years under (1) the percentage of completion method, and (2) the completed contract method.