1. (b) Prepare all the journal entries to record (1) costs, (2) billings, (3) cash collections

   and (4) profit recognition of relevant contract in 2020.

On January 1, 2019, Marsh Contractors agreed to construct a building at a contract price of $17,400,000. Marsh estimated total construction costs would be $12,000,000 and the project would be finished in 2021. Information relating to the costs and billings for this contract is as follows: 2019 2020 2021 Total costs incurred to $4,500,000 $7,920,000 $14,900,000 date Estimated costs to 7,500,000 5,280,000 0 complete Customer billings to date 4,200,000 7,800,000 17,400,000 Collections to date 4,000,000 7,500,000 17,400,000 Assume that the Company uses the PERCENTAGE-OF-COMPLETION METHOD for revenue recognition. The Company's financial year-end is 31 December. Required