Young Tree Construction Company uses the percentage-of-completion method of accounting. In 2020, Young Tree began work under a contract with a contract price of $1,500,000. Other details follow:

	2020	2021
Costs incurred during the year	$980,000	$1,375,000
Estimated costs to complete, as of December 31	420,000	0
Billings during the year	800,000	1,500,000
Collections during the year	250,000	1,500,000

Instructions

(a) What portion of the total contract price would be recognized as revenue in 2020? In 2021?

(b) Assuming the same facts as those above except that Young Tree uses the completed-contract method of accounting, what portion of the total contract price would be recognized as revenue in 2021?

(c) Prepare a complete set of journal entries for 2020 (using percentage-of-completion).