need #14

Three years ago, the Smith Company entered into a contract to construct a building for a client. Smith uses the percentage-of-completion method (i.e. they recognize revenue over time). The details of the contract are summarized in the table below: $ $ Billings during year Cash collections during year Contract price Cost incurred in the year) Cost incurred (running balance) Estimated cost to complete Year 1 4,000 $ 500 $ $12,000 $1,000 $1,000 $3,000 Year 2 5,500 $ 3,500 $ $12,000 $6,000 $7,000 $3,000 Year 3 2,500 8,000 $12,000 $3,000 $10,000 QUESTION: In YEAR 1, Revenue is credited for... 3,000 2,000 4,000 500 3,500 No revenue from the contract is credited in YEAR 1 None of the above is correct, all choices are far from the correct answer Question 14 (5 points) (continued from the previous problem) In YEAR 2, Revenue is... Credited for $600 Debited for $600 Credited for 5,400 Credited for $5,500 Credited for $3,500 No revenue from the contract is credited or debited in YEAR 2 None of the above is correct, all choices are far from the correct