Recording and Reporting Long-Term Construction: Recognize Revenue at a Point in Time and Over Time

Thrasher Construction contracted to construct a building for $780,000. The contract provided for progress payments. Thrashers accounting year-end is December 31. Work began under the contract on July 1 of Year 1 and was completed on September 30 of Year 3. Construction activities follow.

Year 1Construction costs incurred during the year, $144,000; estimated costs to complete, $504,000; progress billings during the year, $122,400; and collections, $112,000. Year 2Construction costs incurred during the year, $360,000; estimated costs to complete, $152,000; progress billings during the year, $306,000; and collections, $304,000. Year 3Construction costs incurred during the year, $156,000. Because the contract was completed, the remaining balance was billed and later collected in full per the contract.

this question is from the topic of revenue recognition from Intermediate Accounting , please help me solve it

First, compute the percent complete at the end of Years 1 and 2 - Note: Use the result EXACTLY as displayed above in the calculations below. -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)