In YR10 Standard Construction Co. began work on a construction project with a base contract price of $100. The contract must be completed by November 1, YR11 otherwise the company will incur a penalty of $15. If the contract is completed by June 1, YR11 the company will earn a bonus of $20. The project was completed on May 1, YR11. Accounting policy for the company is to use the Percentage-of-Completion method and estimate progress based on costs incurred. The company's year-end is December 31. Estimated contract revenue and cost data for each year of construction were as follows: Year Ended December 31 YR10 YR11 Description Base contract price Estimated/Actual bonus or (penalty) Estimated/Actual Contract Revenue $100 0 100 $100 20 120 Cost incurred in prior years Cost incurred in the current year Estimated cost to complete Estimated/Actual Total Cost $ 0 35 35 70 $35 $30 0 65 Amounts billed to customer $60 $40 10. Assume that at December 31, YR11 the company determined the correct amounts of contract revenue and contract profit earned during YR11 were as follows: Contract revenue = $40 Contract profit = $15 The journal entry to record YR11 earnings activity would be: a. Construction In Process Construction Expenses Revenue from Long-Term Contract 15 25 40 15 40 b. Construction In Process Billings on CIP Contract Profit Revenue on Long-Term Contract 15 40 40 25 c. Billings on CIP Construction Expenses Revenue on Long-Term Contract Construction In Process 40 25 40 30 d. Accounts Receivable - CIP Construction Expenses Billings on CIP Construction In Process 40 30 e. None of the above