Crankshaw Co. is in the home renovation business. Crankshaw Co. received $325,000 from customers during January. Of the $325,000 received, $100,000 was for work performed during November and December of the previous year, $175,000 was for work performed during January, and the balance was for work to be performed during February and March.
a. Prepare the journal entry to record the money received in January.
b. How will the cash received for work to be performed in February and March be shown in the financial statements?