392 Chapter 6 Revenue Recognition Connect cel Thrasher Construction Co. was contracted to construct a building for $975,000. The building A6-20 IFRS-Construction Contract (LO6.13, LO6.17): is owned by the customer throughout the contract period. The contract provides for progre 1 July 20X5, and was completed on 30 September 20X7. Construction activities are summa payments, Thrasher's accounting year ends 31 December. Work began under the contract ized below by year: 20X5 20X6 20X7 Required: tion costs. Construction costs incurred during the year, $180,000; estimated costs to complete, $630,000; progress billings during the year, $153,000; and collections, $140,000. Construction costs incurred during the year, $450,000; estimated costs to complete, $190,000; progress billing during the year, $382,500; and collections, Construction costs incurred during the year, $195,000. Because the contract was completed, the remaining balance was billed and later collected in full per the $380,000. contract. 1. Give Thrasher's journal entries to record these events. Assume that percentage of comple tion is measured by the ratio of costs incurred to date divided by total estimated construc 3. Now assume that the building is owned by Thrasher throughout the construction per- 2. Provide the balances that would be shown on the SCI and SFP for this contract for Prepare the journal entries required to record the events from 20X5 to 20X7. Also iod and title is transferred to the customer only once the building is fully constructed. calculate the balances that would be shown on the SCI and SFP for this contract for year. each year.