Accounting

MSK Construction Company contracted to construct a factory building for $525,000. Construction started during 20X1 and was completed in 20X2. Information relating to the contract follows:

20X1                            20X2

Costs incurred during the year                          $290,000                      $150,000

Estimated additional cost to complete            145,000                             —

Billings during the year                                        260,000                           265,000

Cash collections during the year                           240,000                         285,000

Required: Record the preceding transactions in MSK’s books assuming it recognizes revenue at a point in time when control of the completed factory is transferred to the customer at the end of the project.

Please number transactions

• 1Prepare the entry to record the construction costs incurred. Hint: Use Cash, payables, materials, etc.
• 2Prepare the entry to record the amounts billed to the customer.
• 3Prepare the entry to record the cash receipts from the customer.
• 4Prepare the entry to record the construction costs incurred. Hint: Use Cash, payables, materials, etc.
• 5Prepare the entry to record the amounts billed to the customer.
• 6Prepare the entry to record the cash receipts from the customer.
• 7Prepare the entry to record revenue, expense, and completion of the project.