MSK Construction Company contracted to construct a factory building for $$525,000.$ Construction started during $20$X$1$ and was completed in $20$X$2.$ Information relating to the contract follows:

$20$X$120$X$2$

Costs incurred during the year $ $290,000$ $ $150,000$

Estimated additional cost to complete $145,000$

Billings during the year $260,000265,000$

Cash collections during the year $240,000285,000$

Required:

Record the preceding transactions in MSK$$s books assuming it recognizes revenue over time and uses costs incurred to measure the extent to which its performance obligation has been satisfied.

Record the preceding transactions in MSK$$s books assuming it recognizes revenue at a point in time when control of the completed factory is transferred to the customer at the end of the project.