Accounting for Contracts Over Time On January 1, Miller Construction Company contracted to build a parking lot for the city of St. Louis for $900,000. The following transactions and estimates relate to this contract. a. Construction costs incurred during the year $240,000 b. Progress billings $228,000 c. Cash collections $210,000 d. Estimated costs to complete $480,000 Required 1. The company accounts for revenue over time. Compute the percent complete at the end of the first year. Percent Complete Numerator Denominator Result At the end of Year 1 Answer 240,000 Answer 720,000 = 33.33 2. Prepare the journal entries to record (a) costs incurred, (b) progress billings, (c) collections, and (d) any revenue or expense recognition. Note: Use the result EXACTLY as displayed above in the calculations below. Note: If a journal entry isn't required on any of the dates shown, select "N/Adebit" and "N/Acredit" as the account names and leave the Dr. and Cr. answers blank (zero). Ref. Account Name Dr. Cr. a. Construction in Process 240,000 0 Answer Cash 0 240,000 Answer To record constructions costs incurred b. Accounts Receivable 228,000 0 Answer Billings on Contracts 0 228,000 Answer To record progress billings c. Cash 210,000 0 Answer Accounts Receivable 0 210,000 Answer To record collections d. Deferred Revenue 299,970 0 Answer N/ADebit 0 0 Answer Revenues from Long-Term Contracts 0 299,970 Answer To recognize revenues and expenses

1. The company accounts for revenue over time. Compute the percent complete at the end of the first year. 2. Prepare the journal entries to record (a) costs incurred, (b) progress billings, (c) collections, and (d) any revenue or expense recognition. -Note: Use the result EXACTLY as displayed above in the calculations below. -Note: If a journal entry isn't required on any of the dates shown, select "N/A-debit" and "N/A-credit" as the account names and leave the Dr. and Cr. answers blank (zero). 1. The company accounts for revenue over time. Compute the percent complete at the end of the first year. 2. Prepare the journal entries to record (a) costs incurred, (b) progress billings, (c) collections, and (d) any revenue or expense recognition. -Note: Use the result EXACTLY as displayed above in the calculations below. -Note: If a journal entry isn't required on any of the dates shown, select "N/A-debit" and "N/A-credit" as the account names and leave the Dr. and Cr. answers blank (zero)