Fender Construction Company receives a contract to construct a building over a period of 3 years for a price of $700,000. The contract represents a single performance obligation that will be satisfied over time. Information relating to the performance of the contract is summarized as follows:

	2017	2018	2019
Construction costs incurred during the year	$150,000	$242,000	$168,000
Estimated costs to complete	350,000	168,000
Billings during the year	120,000	250,000	330,000
Collections during the year	100,000	260,000	340,000

Required:

1.	Prepare journal entries for all 3 years.
2.	Assume that the contract represents a single performance obligation that will be satisfied at a point in time. Prepare journal entries for all 3 years.

CHART OF ACCOUNTS

Fender Construction Company

General Ledger

	ASSETS
111	Cash
121	Accounts Receivable
141	Inventory
152	Prepaid Insurance
155	Construction in Progress
156	Partial Billings
181	Equipment
198	Accumulated Depreciation

	LIABILITIES
211	Accounts Payable
231	Salaries Payable
250	Unearned Revenue
261	Income Taxes Payable

	EQUITY
311	Common Stock
331	Retained Earnings

	REVENUE
420	Construction Revenue

	EXPENSES
500	Construction Expense
511	Insurance Expense
512	Utilities Expense
521	Salaries Expense
532	Bad Debt Expense
540	Interest Expense
541	Depreciation Expense
559	Miscellaneous Expenses
910	Income Tax Expense

	Assume the contract represents a single performance obligation that will be satisfied over time. Prepare journal entries on December 31 for all 3 years
1.	to record costs of construction for cash.
2.	to record partial billings.
3.	to record collections on account.
4.	to record gross profit recognized.
5.	to close out construction accounts in 2019.
	Additional Instruction

PAGE 2017PAGE 2018PAGE 2019

GENERAL JOURNAL

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

	Assume that the contract represents a single performance obligation that will be satisfied at a point in time. Prepare journal entries on December 31 for all 3 years
1.	to record costs of construction for cash.
2.	to record partial billings.
3.	to record collections.
4.	to recognize revenue at completion on 2019.
5.	to recognize expense at completion on 2019.

PAGE 2017PAGE 2018PAGE 2019

GENERAL JOURNAL

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