Scenario 1 Contract price 190,000 2022 2023 2024 Costs incurred during the year 60,000 70,000 20,000 Costs incurred to date +Estimated costs to complete 75,000 25,000 0 Estimated total costs Estimated profit/loss for entire contract % complete (do not round) Revenue this period (based on progress) Profit this period Costs of construction (COGS=revenue-profit) Billings 70,000 65,000 55,000 Cash collection 45,000 70,000 75,000 Provide the journal entries to record costs incurred, billings, and cash collections for 2022. Provide the journal entries to record revenue if revenue is recognized at completion for all three years (if any) Provide the journal entries to record revenue if revenue is recognized over time for all three years (if any) Provide the closing journal entry for the year the asset is transferred to buyer Financial statements presentation (Revenue recognition at completion of project) Balance sheet CIP Billings A/R What is included in the balance sheet for the three years? What is included in the Income statement for the three years? Financial statements presentation (Revenue recognition over time) Balance sheet (Revenue recognition over time) CIP Billings A/R What is included in the balance sheet for the three years? What is included in the Income statement for the three years? Scenario 2 Contract price 190,000 2022 2023 2024 Costs incurred during the year 60,000 90,000 20,000 Costs incurred to date +Estimated costs to complete 75,000 15,000 0 Estimated total costs Estimated profit/loss for entire contract % complete (do not round) Revenue this period (based on progress) Profit this period Costs of construction (COGS=revenue-profit) Billings 70,000 65,000 55,000 Cash collection 45,000 70,000 75,000 Provide the journal entries to record revenue if revenue is recognized at completion for all three years (if any) Provide the journal entries to record revenue if revenue is recognized over time for all three years (if any) Financial statements presentation (Revenue recognition at completion of project) Balance sheet CIP Billings A/R What is included in the balance sheet for the three years? What is included in the Income statement for the three years? Financial statements presentation (Revenue recognition over time) Balance sheet (Revenue recognition over time) CIP Billings A/R What is included in the balance sheet for the three years? What is included in the Income statement for the three years? Scenario 3 Contract price 190,000 2022 2023 2024 Costs incurred during the year 60,000 70,000 55,000 Costs incurred to date +Estimated costs to complete 75,000 65,000 0 Estimated total costs Estimated profit/loss for entire contract % complete (do not round) Revenue this period (based on progress) Profit this period Costs of construction (COGS=revenue-profit) Billings 70,000 65,000 55,000 Cash collection 45,000 70,000 75,000 Provide the journal entries to record revenue if revenue is recognized at completion for all three years (if any) Provide the journal entries to record revenue if revenue is recognized over time for all three years (if any) Financial statements presentation (Revenue recognition at completion of project) Balance sheet CIP Billings A/R What is included in the balance sheet for the three years? What is included in the Income statement for the three years? Financial statements presentation (Revenue recognition over time) Balance sheet (Revenue recognition over time) CIP Billings A/R What is included in the balance sheet for the three years? What is included in the Income statement for the three years?