Haversham Company has contracted to build for the City of London a new jail.The estimated cost of the jail is $6,000,000 and the contract price is $8,000,000.The jail took three years to complete as follows:

201420152016

Costs to date$1,200,000$4,200,000$6,200,000

Cost to complete$4,800,000$2,000,000$0

Amounts billed$1,400,000$4,400,000$2,300,000

Amounts collected$1,300,000$4,000,000$2,700,000

Record all journal entries necessary for each of the three years below:

2014Dr. Cr.

2015

2016

Give the balance sheet presentation of the construction at the end of 2014.

Assume that Haversham uses the completed contract method.Determine the amount of revenue and expense to be recognized in:

2014 20152016

Revenue

Expense