Problem 2 An entity enters into a three year service contract at a contracted price of $300,000 on December 31, 20x0. At that time it was estimated that the total contract costs would amount to $250,000. Date relating to the contract over its three years are as follows: Costs incurred during year Expected costs to complete contract 20x1 20x2 20x3 $80,000 160,000 $55,000 $95,000 90,000 Required - For each the three years, calculate the amount of revenues and profit/loss that will be realized. Problem 3 Kelsey Company began operations on January 1, 20x6. The Kelsey Company calculates its allowance for doubtful accounts by aging the accounts receivable based on the following percentages: Days Past Invoice Date Percent Estimated To be Uncollectible 0-30 1.5% 31-60 8% 61-90 25% Over 90 75% The following additional information relates to the years ended December 31, 20x6 and 20x7: Credit Sales 20x7 $6,000,000 20x6 $5,350,000 Collections (excluding recoveries) 5,780,000 4,980,000 Accounts written off 58,000 35,000 Recovery of accounts previously written off 15,000 Days Past Invoice at December 31 - 0-30 250,000 195,000 31-60 96,000 78,000 61-90 76,000 45,000 Over 90 75,000 17,000 Required- Prepare all journal entries to record the above transactions. 91