Essan Construction Inc., which has a calendar year end, has entered into a non$-$cancellable fixed price contract for $$2\mathrm{.}8$ million beginning September $1,2023,$ to build a road for a municipality. It has been estimated that the road construction will be complete by June $2025.$ The following data pertain to the construction period.

$$

$2023$

$2024$

$2025$

Costs to date

$ $800,000$

$$1,800,000$

$$2,350,000$

Estimated costs to complete

$1,700,000$

$600,000$

$0$

Progress billings to date $($non$-$refundable$)$

$850,000$

$2,300,000$

$2,800,000$

Cash collected to date

$700,000$

$2,200,000$

$2,800,000$

except assume that at December $31,2024,$ Essan estimates the costs to complete the road contract at $$1,050,000$ instead of $$600,000.$

Instructions

Using the percentage$-$of$-$completion method, calculate the percentage complete for $2023$ and $2024.$ Round the percentage complete to four decimal places.

Calculate the amount of revenue to be recognized in $2023$ and $2024.$

Calculate the construction costs to be expensed in $2024.$

Prepare the journal entry at December $31,2024,$ to record long$-$term contract revenues, expenses, and losses for $2024.$

What is the balance in the Contract Asset$/$Liability account at December $31,2023$ and $2024?$

Show how the construction contract would be reported on the SFP and the income statement for the year ended December $31,2024.$

Assume that Essan uses the zero$-$profit or completed$-$contract method. What would be the journal entry recorded on December $31,2024?$