The D. Jones Ship Company received an order on July 1, 2010, to build a 110,000-ton tanker. The costs connected with obtaining the sale were $20,000, and these were all incurred in 2010. It is estimated that the tanker will take 24 months to build.

How should the selling costs be treated? How should the costs connected with constructing the ship be treated? When should the revenue from the sale of the ship be recognized?