Craft Construction
Craft Construction Entered into a Contract to Construct

Essay

Craft Construction
Craft Construction entered into a contract to construct a generator station for a utility customer. The project was started in 2016 and completed in 2017. Cost and other information is presented below.
$\begin{array}{lrc}&2016&2017\\\text { Costs incurred during the year } & \$ 225,000 & \$ 550,000 \\\text { Estimated costs to complete } & 450,000 & -0 \text { - } \\\text { Billings during the year } & 200,000 & 700,000 \\\text { Cash collections during the year } & 150,000 & 750,000\end{array}$

-Refer to Craft Construction. Assume Craft uses the percentage-of-completion method for revenue recognition. Prepare all journal entries to record costs, billings, collections and profit recognition.