Question 6 (1 point) On 1/1/2015, your Company entered into a contract to develop and install a network security system for a client. The project is completed on 12/31/2017 Information related to the contract is as follows ($ millions) - S 180 S Year 1 Year 2 Year 3 Billings during year $ $ 300 Cash collections during year $ - $ S 300 Contract price S 300 $ 300 $ 300 Cost incurred in the year) S 40 S 140 S 20 Cost incurred (running balance) 200 Estimated cost to complete 45 S Your Company uses the percentage-of-completion method of accounting (i.e. recognition of profit over time) for long-term construction contracts. Which of the following is true about the journal entries recorded at the end of YEAR 12 S S 40 S 160 S An income statement account named "Construction in progress" is debited for $60 mill. Revenue is credited for $40 mill An income statement account called "Expenses for construction" is debited for $40 mill All of the above None of the above Question 7 (1 point) (continued from previous question) Which of the following is trye about YEAR 2? The profit from the construction recognized by your company in the income statement of YEAR 2 is $40 mill Revenue is credited for $180 mill The increase in the balance sheet account "Construction in progress" exceeds the profit from the construction recognized in YEAR 2 All of the above None of the above (continued from previous question) Which of the following is true about the YEAR 3? Cash is debited for an amount equal to the profit from the construction The income statement account "Billings" is credited for $300 mill. An account named "Gain from construction" is credited in order to revert the previous year's debit entry to the account "loss on construction" All of the above None of the above