Shock Wave, Inc. began work on a $7,000,000 contract in 2008 to construct an office building.

During 2008, Shock Wave, Inc. incurred costs of $1,715,000, billed their customers for $1,200,000, and col-

lected $960,000. At December 31, 2008, the estimated future costs to complete the project total $3,185,000.

Prepare Shock Waves 2008 journal entries using the

a) percentage-of-completion method

b) the completed contract method