During 2016, the Samuelson Construction Company began construction on an office building for the City of Gernon. The contract price is $8,000,000 and the building will take approximately 18 months to complete. Completion is scheduled for early in 2018. The companys fiscal year ends on December 31.

The following is a year-by-year recap of construction costs incurred and the estimated costs to complete the project as of the end of each year. Progress billings and cash collections also are indicated.

	2016	2017	2018
Actual costs incurred during the year	$1,500,000	$4,500,000	$1,550,000
Actual costs incurred in prior years	0	1,500,000	6,000,000
Cumulative actual costs incurred to date	1,500,000	6,000,000	7,550,000
Estimated costs to complete at end of year	4,500,000	1,500,000	0
Total costs (actual + estimated)	$6,000,000	$7,500,000	$7,550,000
Billings made during the year	$1,400,000	$5,200,000	$1,400,000
Cash collections during year	1,000,000	4,000,000	3,000,000

PART B: Assume the contract does NOT quality for recognizing revenue over time.

How much revenue will be recognized in each of the years?

Prepare the necessary revenue related journal entries that would be recorded for revenue recognition in each of the years. (If no entry, note no entry.)

Prepare the balance sheet related journal entries for each of the years.

What amount would be recorded as the contract asset or liability at the end of each of the years?