Recording Long$-$term Construction: Recognize Revenue at a Point in Time

Mullen Construction contracted to build a municipal warehouse for the city of Dallas for $$840,000.$ The contract speci$$ed that the city would pay Mullen each month the progress billings, less $10\%,$ which was to be held as a retention reserve. At the end of construction, the $$nal payment would include the reserve. Each billing, less the $10\%$ reserve, must be paid within $10$ days after submission of a billing to the city. Transactions relating to the contract follow.

Year $1$Construction costs incurred during the year, $$224,000$; estimated costs to complete, $$448,000$; progress billing, $$212,800$; and collections per the contract.

Year $2$Construction costs incurred during the year, $$392,000$; estimated costs to complete, $$128,800$; progress billings, $$313,600$; and collections per the contract, assuming revenue from the contract is appropriately recognized over time.

Year $3$Construction costs incurred during the year, $$112,000.$ The remaining billings were submitted by October $1,$ and $$nal collections were completed on November $30.$

Required

a$.$ Provide the Year $1,$ Year $2,$ and Year $3$ journal entries for $(1)$ construction costs incurred, $(2)$ progress billings, $(3)$ cash collections, $(4)$ revenues and expenses, and $(5)$ to close out accounts upon completion of the contract, assuming revenue from the contract is appropriately recognized at a point in time.