Recording Long-Term Construction: Recognize Revenue at a Point in Time and Over Time Watson Construction Company contracted to build a plant for $500,000. Construction started in January 2020 and was completed in November 2021. Watson uses the cost-to-cost method to measure the completion of its performance obligations. Data relating to the contract follow. Costs incurred during year Estimated additional costs to complete Billings during year Cash collections during year 2021 2020 $290,000 $120,000 125,000 0 270,000 230,000 250,000 250,000 Revenue Recognized Over Time Revenue Recognized at a Point in Time a. Provide the 2020 and 2021 journal entries for Watson assuming revenue is recognized at a point in time. Provide entries for (1) construction costs incurred, (2) progress billings, (3) cash collections, and (4) revenues and expenses. Note: If a journal entry isn't required for the transaction, select "N/A" as the account names and leave the Dr. and Cr. answers blank (zero). Date Account Name Dr. Cr. 2020 (1) Construction in Process 290,000 Cash, Payables, etc. 0 290,000 2020 (2) Accounts Receivable 270,000 0 Billings on Contracts 0 270,000 2020 (3) Cash 250,000 0 Accounts Receivable 2020 (4) N/A N/A 000 250,000 To record revenue from contract. N/A N/A oo 0 oo 120,000 0 0 120,000 0 0 000 To record cost of contract. 2021 (1) Construction in Process Cash, Payables, etc. 2021 (2) Accounts Receivable Billings on Contracts 2021 (3) Billings on Contracts Revenue from Long-Term Contracts + 2021 (4) Cost of Construction Construction in Process To record revenue from contract, To record cost of contract. 0 O 0 0 0 Recording Long-Term Construction: Recognize Revenue at a Point in Time and Over Time Watson Construction Company contracted to build a plant for $500,000. Construction started in January 2020 and was completed in November 2021. Watson uses the cost-to-cost method to measure the completion of its performance obligations. Data relating to the contract follow. Costs incurred during year Estimated additional costs to complete Billings during year Cash collections during year 2020 2021 $290,000 $120,000 125,000 0 270,000 230,000 250,000 250,000 Revenue Recognized at a Point in Time Revenue Recognized Over Time b. Provide the 2020 and 2021 journal entries for Watson assuming revenue is recognized over time. Provide entries for (1) construction costs incurred, (2) progress billings, (3) cash collections, (4) revenues and expenses, and (5) to close out accounts upon completion of the contract. Note: If a journal entry isn't required for the transaction, select "N/A" as the account names and leave the Dr. and Cr. answers blank (zero). Note: List multiple debits or credits (when applicable) in alphabetical order according to the first letter of the account name. Note: Round amounts to the nearest whole dollar. Date Account Name Dr. Cr. 2020 (1) Construction in Process Cash, Payables, etc. 0 2020 (2) Accounts Receivable 0 Billings on Contracts 2020 (3) Cash Accounts Receivable 000000 2020 (4) OO 0 0 0 2021 (1) Construction in Process 2021 (2) 2021 (3) OO 0 2021 (4) Cash, Payables, etc. 0 0 0 O O 0 000 0000 0 2021 (5) Billings on Contracts 00 Cost of Construction 0000 Cash Accounts Receivable Accounts Payable Retained Earnings Construction in Process Billings on Contracts Revenue from Long-Term Contracts Cost of Construction Loss from Long-Term Contracts N/A