Star Construction Corp, has contact to construct a building for $10,950,000. The building is controlled by the customer throughout the term of the contract. Total cost to complete the building were originally estimated at $8,850,000. Construction commenced on 4 February 20X5. Actual costs were in line with estimated costs for 20X5 and 20X6. In 20X7, actual costs exceeded the estimated cost by $150,000.

Total construction costs incurred in each year were as follows.

20X5 $2,700,000

20X6 $4,500,000

20X7 $1,800,000

Billings each year were as follows.

20X5 $2,300,000

20X6 $4,900,000

20X7 $3,750,000

1. Calculate the revenue and gross profit for the construction project each of the three years assuming the company uses inputs to measure progress.

2. Prepare the journal entries for revenue recognition for each year and for contract completion in 20X7

3. Prepare the journal entries for revenue recognition for each year and for contact completion in 20X7, if the customer did not take control of the asset until the building was fully constructed and title transferred.