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 of Year 1 and was completed in November of Year 2. Watson uses the cost-to-cost method to measure the completion of its performance obligations. Data relating to the contract follow. As of December 31 Costs incurred Year 1 Year 2 $290,000 $120,000 Estimated costs to complete 125,000 Billings Cash collections 270,000 230,000 250,000 250,000