(Long-Term Contract Reporting) Derrick Adkins Construction Company began operations in 2007. Construction activity for the first year is shown below. All contracts are with different customers, and any work remaining at December 31, 2007, is expected to be completed in 2008.

Instructions Prepare a partial income statement and balance sheet to indicate how the above information would be reported for financial statement purposes. Derrick Adkins Construction Company uses the completedcontract method.

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Cash Project Total Contract Price Billings Collections Contract Costs Incurred through 12/31/07 through through Estimated Additional Costs to 12/31/07 12/31/07 Complete 123 $ 560,000 $ 360,000 $340,000 $450,000 $140,000 670,000 220,000 210,000 126,000 504,000 500,000 500,000 440,000 330,000 -0- $1,730,000 $1,080,000 $990,000 $906,000 $644,000