Clorad Corporation contracts with a customer to construct a building. It appropriately determines that it has one performance obligation which is satisfied over time. Using the following information for Year 1:

Year 1 (of 4-year project):
Construction costs incurred during the year	$174,000
Estimated costs to complete the contract	426,000
Partial billings to customers	100,000
Collections from customers	25,000
Total contract price	1,000,000

Required:

Prepare the journal entries to record Year 1s (a) construction costs, (b) partial billings, (c) cash collections, and (d) gross profit.

GENERAL JOURNAL

	DATE	ACCOUNT TITLE	POST. REF.	DEBIT	CREDIT
1
2
3
4
5
6
7
8
9