Perfectionist Construction Company was the low bidder on an office building construction contract. The contract bid was$9,000,000, with an estimated cost to complete the project of$7,000,000. The contract period was 30 months starting May 1, 2014.Because of changes requested by the customer, the contract price was adjusted downward to$8,600,000 on May 1, 2015. A record of construction activities for the years2014-2017 is as follows:
|
Year
|
Actual Cost
|
Progress Billings
|
Cash Receipts
|
Remaining Cost
|
|
2014
|
$1,900,000
|
$2,500,000
|
$1,900,000
|
$5,150,000
|
|
2015
|
3,600,000
|
3,400,000
|
3,100,000
|
1,600,000
|
|
2016
|
1,670,000
|
2,700,000
|
2,500,000
|
0
|
|
2017
|
|
|
1,100,000
|
|
Prepare all journal entries and the relevant balance sheet entries for 2014-2017under thepercentage-of-completion method of revenue recognition