Johnson building co. accepted a three-year, $1,000,000 fixed-fee contract to renovate a parking deck. John uses the percentage of completion method and the cost-to-cost method of measuring progress. Information related to the construction contract follows

	2022	2023	2024
Actual construction costs incurred during the year	$ 350,000	$ 525,000	$ 50,000
Construction costs incurred in prior years	0	350,000	875,000
Cumulative construction costs incurred to date	350,0000	875,000	925,000
Estimated costs to complete	450,000	25,000	0
Estimated total costs	800,000	900,000	925,000
Progress billings made during the year	500,000	300,000	200,000
Cash collections during the year	400,000	350,000	250,000

Required:

a. Calculate the percentage of completion, revenues and gross profits recognized for each year.

b. Prepare the journal entries required for each year to record the contract. Show all supporting computations.

c. Prepare partial balance sheet for 2022 and 2023