A construction company began operations on January 2, 2010. During the year the company was awarded three construction contracts. The company incurred $300,000 operating expenses for the year for which $275.000 has becn paid while the balance is owed as of December 31, 2010. Project data is summarized for each of the three projects in the following paragraphs. Project 101: Low-Rise Office Building The initial contract was signed on January 5, 2010 in the amount of $1,000,000. This amount included $800,000 for construction costs, $150,000 for overhead mark-up, and s50,000 for protit markup. The contractor brok ground on February 4, 2010. During the course of construction the client decided to upgrade the quality of the lighting and plumbing fixtures, resulting in a change order issued to the contractor in the amount of S100,000 on October 7, 2010. The change order price was calculated by the contractor as follows: $50,000 construction costs $37,500 overhead markup, S12,500 profit markup At the end of 2010, construction was not complete. However, the client was renting out office space to other entities as well as using some of the offices for the client's own business entity. Work remaining as of December 31, 2010 included surfacing the parking lot, erecting a portable parking attendant's station, miscellaneous site concrete work and landscaping. This work was schedule to be completed by May 1, 2010, weather permitting. A summary of accounting data as of December 31, 2010 included total construction costs in the amount of $800,000 for which $600,000 was paid. The balance reflected unpaid bills for the month of December, and tention withheld on subcontracts throughout the course of the project. The total progress billing as of December 1, 2010 was $1,000,000 of which $900,000 was collected with the balance outstanding as retention receivable The project manager estimated that given the work left to be completed, approximately $200,000 of construction cost would be incurred Project 102: Retaining Wall The initial contract was signed on October 17, 2010 in the amount of $100000 The contract called for 1000 linear feet of 8 foot high retaining wall to be erected in a residential subdivision. Excavating and backfill was let to another contractor under separate contract. The estimator determined that the wall would cost $40.00 per linear foot for concrete, $10.00 per linear foot for reinforcing, and S50.00 per linear foot for labor. Average labor cost was $20.00 per hour. The hourly rate included insurances and fringes tied to labor. Overhead and profit markup were included in these unit rates At the end of 2010 the project was not complete. The schedule indicates that backfilling of the wall would not occur until all wall installation work was complete. The project manager determined 780 linear feet of wall had been installed and 2,150 labor hours were used. It was estimated it would take $30.000 to complete the project, requiring an additional 450 labor hours Accounting records as of December 31, 2010 indicated that total expenditures to date were $80.000 of which $70,000 were paid. Progress billings to date were $85,000 and cash collected was $76.500