Samson Construction Company is a small company that constructs buildings. Normally, the time for Samson to complete the construction of a building is about six months.

Recently, Samson signed a contract to build a three-story office building at a price of $900,000. Samson expects that it will take two years to complete the construction, at a cost of $600,000.
Bill Samson, the owner, has come to you for advice. He says: “Normally, my company records the revenue and related expenses for a project when it is completed. However, this new project will take much longer than usual. My construction crews will be working on the project for two years. My company will have to pay for their salaries plus all the materials, etc., so a lot of money will be tied up in the contract and won't be recovered until the selling price is collected when the building is completed. How and when should my company record the revenue and expenses on this project?”
Required: Prepare a written answer to Bill Samson's question. lo7