Problem 3 (15 Points)

Lily Construction Company was the low bidder on a construction project to build indoor batting cages for $1,800,000.

The project was begun in 2017 and completed in 2018. Cost and other data are presented below:

Costs incurred during the year 2017-- $450,000 2018-- $1,100,000

Estimated costs to complete 2017---1,050,000 2018-- 0

Billings during the year 2017--400,000 2018--1,400,000

Cash collections during the year 2017--300,000 2018---1,500,000

Prepare the journal entries for 2017 and 2018 assuming Lily uses the percentage of completion method.

Prepare the revenue recognition journal entries for 2017 and 2018 assuming Lily uses the completed contract

method.