Watson Construction Company contracted to build a plant for $1,250,000. 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 Estimated costs to complete 312.500 Billings Cash collections Required Year 1 1. 2. a. Provide the Year 1 and Year 2 journal entries for Watson assuming revenue is recognized at a point in time. Provide entries for (1) construction costs incurred, (2) progress billings, (3) cash collections, and (4) revenues and expenses. Note: If a journal entry isn't required on any of the dates shown, select "N/A-debit" and "N/A-credit" as the account names and leave the Dr. and Cr. answers blank (zero). 3. 4. Point in Time Over Timel Year 2 1. Year 1 Year 2 $725,000 $300,000 2. 3. 4. 675,000 575,000 625,000 625,000 Account Name Construction in Process Cash To record constructions costs incurred Accounts Receivable Billings on Contracts To record progress billings Cash Accounts Receivable To record collections To recognize revenues To recognize expenses Account Name To record constructions costs incurred To record progress billings To record collections To recognize revenues To recognize expenses v v V V V V V V < < < < Dr. Dr. 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Cr. Cr. 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0