Answer all three of the following problems: Wind and Water Energy Company hired Smith Construction Corporation to build a new building for its operations. Smith agreed to build the plant for $1,200,000, and Wind and Water Energy agreed to pay Smith $300,000 on January 1 and July 1 for two years, begin ning July 1, 2006. Smith estimates that it will incur total costs of $950,000 to complete con struction. The following details exist at December 31, 2006 Costs incurred to date $400,000 Estimated costs to complete 550,000 Billings to date 300,000 Collections to date 300,000 Required: 1. Calculate the amount of income that Smith should recognize for 2006, using the per centage-of-completion method. Sad Construction Company uses the percentage-of-completion method when total con- struction costs can be estimated. Sad is building an office building for Porter Company for $10,000,000 with the following details: 12/31/2004 12/31/2005 12/31/2006 Costs incurred to date $2,000,000 $3,500,000 $6,500,000 Estimated costs to complete 6,000,000 4,500,000 1,500,000 Billings to date 6,000,000 8,000,000 10,000,000 Collections to date 3,000,000 5,500,000 10,000,000 Required: 1. Prepare all journal entries for 2004 that Sad should make for this job. 2. Prepare all journal entries for 2005 that Sad should make for this job. 3.) Arial Company had the following transactions in the first year of its operations. A. On January 10, 2005, the company issued 100,000 shares of its $5 par common stock for $8 per share and 20,000 shares of its $40 par, 6 percent preferred stock for 58 per share. B. On March 1, the company issued 10,000 shares of common and 4,000 shares of pre- ferred for $330,000. The market value of the common stock and the preferred stock on March I was $10 and $50, respectively C On June 1, the company issued 8,000 shares of common stock to its legal counsel as payment for legal services. The legal counsel had billed for 1,000 hours of service, and the normal billing fee is $100 to $120 per hour. The market price of the common stock on June I was $11 per share. D. On July 1, 5.000 shares of common stock were purchased as treasury stock at $14 per share E on December 15, the board of directors voted to pay the annual cash dividend to pre- ferred stockholders on January 20, 2006, E on December 31, the company determined that its income for the year was $405,000 Required: 1. Record journal entries for these transactions for 2005. 2 Develop the stockholders' equity section of the balance sheet as of December 31, 2005. Date Accounts Debit Credit