KDS Builders Inc., is a reputed construction company. During 2020, KDS Company started a construction job with a contract price of $1,630,000 to build a commercial building. The job was completed in 2022. The following information is available.

2020 2021 2022

Cost incurred to date $300,000 $850,000 $1,090,000

Estimated costs to complete 600,000 200,000 -0-

Billing to date 300,000 800,000 530,000

Collections to date 195,000 610,000 825,000

Required:

1. Determine the amount of construction revenue,construction cost, and gross profit or loss to be recognized in each of the three years assuming,

(a) the contract qualifies for recognizing revenue over time and

(b) the contract does not qualify for recognizing revenue over time.

2. Assuming the contract qualifies for recognizing revenue over time, prepare the necessary journal entries for each of the three years to account for construction costs, construction revenue, contract billings and cash collection and to close the construction accounts in 2022.

3.Assuming the contract qualifies for recognizing revenue over time, prepare a partial balance sheet for 2020 and 2021 that includes all construction -related accounts..