On January 1, Miller Construction Company contracted to build a baseball stadium for the city of St. Denise for $24,000,000. The following transactions and estimates relate to this contract.

Construction costs incurred during the year	$3,960,000
Progress billings	$3,460,000
Cash collections	$2,960,000
Estimated costs to complete	$18,040,000

Required

1. The company accounts for revenue over time. Compute the percent complete at the end of the first year. Answer

%

2. Prepare the journal entries to record (a) costs incurred, (b) progress billings, (c) collections, and (d) any revenue or expense recognition.

Ref.	Account Name	Dr.	Cr.
a.	Accounts ReceivableBillings on ContractsCashConstruction in ProcessCost of ConstructionCost of Goods SoldDeferred RevenueRevenues from Long-Term ContractsSales RevenueN/ADebitN/ACredit		Answer
	Accounts ReceivableBillings on ContractsCashConstruction in ProcessCost of ConstructionCost of Goods SoldDeferred RevenueRevenues from Long-Term ContractsSales RevenueN/ADebitN/ACredit		Answer
	To record constructions costs incurred
b.	Accounts ReceivableBillings on ContractsCashConstruction in ProcessCost of ConstructionCost of Goods SoldDeferred RevenueRevenues from Long-Term ContractsSales RevenueN/ADebitN/ACredit		Answer
	Accounts ReceivableBillings on ContractsCashConstruction in ProcessCost of ConstructionCost of Goods SoldDeferred RevenueRevenues from Long-Term ContractsSales RevenueN/ADebitN/ACredit		Answer
	To record progress billings
c.	Accounts ReceivableBillings on ContractsCashConstruction in ProcessCost of ConstructionCost of Goods SoldDeferred RevenueRevenues from Long-Term ContractsSales RevenueN/ADebitN/ACredit		Answer
	Accounts ReceivableBillings on ContractsCashConstruction in ProcessCost of ConstructionCost of Goods SoldDeferred RevenueRevenues from Long-Term ContractsSales RevenueN/ADebitN/ACredit		Answer
	To record collections
d.	Accounts ReceivableBillings on ContractsCashConstruction in ProcessCost of ConstructionCost of Goods SoldDeferred RevenueRevenues from Long-Term ContractsSales RevenueN/ADebitN/ACredit		Answer
	Accounts ReceivableBillings on ContractsCashConstruction in ProcessCost of ConstructionCost of Goods SoldDeferred RevenueRevenues from Long-Term ContractsSales RevenueN/ADebitN/ACredit		Answer
	Accounts ReceivableBillings on ContractsCashConstruction in ProcessCost of ConstructionCost of Goods SoldDeferred RevenueRevenues from Long-Term ContractsSales RevenueN/ADebitN/ACredit		Answer
	To recognize revenues and expenses