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Big Red Engineering Associates entered into a 3 year contract to construct an office building at...

Big Red Engineering Associates entered into a 3 year contract to construct an office building at a contract price of $1,700,000. With the construction data below prepare the necessary journal entries to record cost incurred, billings to customers, cash collections, and the end of year adjusting entry applicable to percentage of completion method:

                                                 Year 1                    Year 2                    Year 3

Construction cost incurred       250,000                 900,000                  210,000

Estimated cost to complete   1,000,000                  287,500                       0

Progress Billings                      190,000               1,200,000                  310,000

Collections from customer       150,000               1,100,000                  450,000

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