Big Red Engineering Associates entered into a 3 year contract to construct an office building at a contract price of $1,700,000. With the construction data below prepare the necessary journal entries to record cost incurred, billings to customers, cash collections, and the end of year adjusting entry applicable to percentage of completion method:

Year 1 Year 2 Year 3

Construction cost incurred 250,000 900,000 210,000

Estimated cost to complete 1,000,000 287,500 0

Progress Billings 190,000 1,200,000 310,000

Collections from customer 150,000 1,100,000 450,000