Stanford Company has contracted to build for the City of New London a new courthouse. The estimated cost of the jail is $6,000,000, and the contract price is $9,000,000. The courthouse took three years to complete as follows:

2014 2015 2016 Costs to date $1,200,000 $4,000,000 $6,400,000 Cost to complete $4,800,000 $2,400,000 $0

Amounts billed to date $1,400,000 $5,800,000 $9,000,000 Amounts collected to date $1,300,000 $4,300,000 $9,000,000

Record all journal entries necessary for each of the three years below: (2014, 2015, 2016)

2014 Dr. Cr.

2015

2016

Give the balance sheet presentation of the construction at the end of 2014.

Assume that Stanford uses the completed contract method. Determine the amount of revenue and expense to be recognized in: 2014 2015 2016

Revenue Expense