$4$On $30$ April $20$X$2,$ Neuman Ltd$.$ sells a product to a customer for $$720,000.$ The product carries a one$-$year assurance warranty. Neuman management estimates that the probable cost of fulfilling the warranty will be $$60,000.$ Between $1$ May and $31$ December $20$X$2,$ the actual warranty cost was $$24,000.$ On $31$ December $20$X$2,$ management decides that the probable additional warranty cost will be no more than $$16,000.$ Between $1$ January and $30$ April $20$X$3,$ the additional cost was $$14,000.$

Required:

$1.$ Prepare the entries concerning the sale and the warranty for $30$ April $20$X$2$ through $30$ April $20$X$3.($If no entry is required for a transaction$/$event$,$ select $"$No journal entry required" in the first account field.$)$

$1.$ Assume instead that the warranty now includes service and is sold separately with a stand$-$alone value of $$95,000.$ The product has a stand$-$alone value of $$735,000$ and the total contract is $$720,000.$ Prepare the relevant journal entries for $30$ April $20$X$2$ through $30$ April $20$X$3.($If no entry is required for a transaction$/$event$,$ select $"$No journal entry required" in the first account field. Percentages are rounded to $1$ decimal place.$)$

$$

$5$BigBoy Equipment Inc. sells heavy$-$duty forklift trucks. Model $217$A has a stand$-$alone price of $$175,000.$ BigBoy offers to sell the $217$A inclusive of a three$-$year service contract for $$225,200.$

Required:

Prepare a journal entry to record the sale of one Model $217$A forklift truck plus service contract for $$225,200$ assuming:$($If no entry is required for a transaction$/$event$,$ select $"$No journal entry required" in the first account field.$)$

A comparable service contract is sold separately for $$75,000.$ BigBoy uses the relative stand$-$alone value method.

The service contract has a variable stand$-$alone value ranging from $$43,600$ to $$75,000$ and BigBoy uses the residual value method.

$6$Star Construction Corp. has a contract to construct a building for $$10,971,300.$ The building is controlled by the customer throughout the term of the contract. Total costs to complete the building were originally estimated at $$8,874,300.$ Construction commenced on $4$ February $20$X$5.$ Actual costs were in line with estimated costs for $20$X$5$ and $20$X$6.$ In $20$X$7,$ actual costs exceeded estimated costs by $$143,700.$

Total construction costs incurred in each year were as follows:

$$

$$

$$

$20$X$5$

$

$2,705,400$

$$

$20$X$6$

$

$4,509,000$

$$

$20$X$7$

$

$1,803,600$

$$

$3.$

Billings $($and cash collections$)$ each year were as follows:

$4.$

$$

$$

$20$X$5$

$

$2,304,500$

$$

$20$X$6$

$

$4,909,600$

$$

$20$X$7$

$

$3,757,200$

$$

Required:

$1.$ Calculate the revenues and gross profit for the construction project for each of the three years assuming the company uses inputs to measure progress.$($Round intermediate calculations to $2$ decimal places. Round final answers to nearest whole dollars.$)$

$2.$ Prepare the journal entries for revenue recognition for each year and for contract completion in $20$X$7.($If no entry is required for a transaction$/$event$,$ select $"$No journal entry required" in the first account field. Percentages are rounded to two decimal places.$)$

$3.$ Prepare the journal entries for revenue recognition for each year and for contract completion in $20$X$7,$ if the customer did not take control of the asset until the building was fully constructed and title transferred.$($If no entry is required for a transaction$/$event$,$ select $"$No journal entry required" in the first account field. Percentages are rounded to two decimal places.$)$