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In February $2023,$ Crane Construction signed a contract and commenced construction on a parking garage. The total contract price

was $$89\mathrm{.}80$ million and was expected to be completed in July $2027$ at a total estimated cost of $$82\mathrm{.}0$ million. Payment by the customer

was to be made in several stages, based on significant events and dates throughout the construction timeline. The customer was to

have control over the parking garage and was able to make major changes to the project during the construction process. Crane's year$-$

end was September $30.$

By the end of September, $2023,$ Crane had incurred $$20,500,000$ in costs and had invoiced $$10,600,000$ in progress billings.

$$7,800,000$ of the progress billings had been collected.

By September $30,2024,$ Crane had incurred $$43,450,000$ in total costs and had invoiced $$45,003,000$ in progress billings, including

the progress billings in $2023.$ Of the total billings, $$30,000,000$ in total had been collected. Also, Crane reviewed its cost estimates on

the project, and now believed the parking garage would cost $$79\mathrm{.}00$ million in total to complete.

$($a$)$

No$.$ Account Titles and Explanation

Materials, Cash, Payables

$($To record the $2023$ cost of construction$)$

Billings on Construction in Process

$($To record the $2023$ progress billings$)$

In February $2023,$ Crane Construction signed a contract and commenced construction on a parking garage. The total contract price

was $$89\mathrm{.}80$ million and was expected to be completed in July $2027$ at a total estimated cost of $$82\mathrm{.}0$ million. Payment by the customer

was to be made in several stages, based on significant events and dates throughout the construction timeline. The customer was to

have control over the parking garage and was able to make major changes to the project during the construction process. Crane's year$-$

end was September $30.$

By the end of September, $2023,$ Crane had incurred $$20,500,000$ in costs and had invoiced $$10,600,000$ in progress billings.

$$7,800,000$ of the progress billings had been collected.

By September $30,2024,$ Crane had incurred $$43,450,000$ in total costs and had invoiced $$45,003,000$ in progress billings, including

the progress billings in $2023.$ Of the total billings, $$30,000,000$ in total had been collected. Also, Crane reviewed its cost estimates on

the project, and now believed the parking garage would cost $$79\mathrm{.}00$ million in total to complete.

$($a$)$

No$.$ Account Titles and Explanation

Debit

Credit

$($To record the $2023$ cost of construction$)$

$10,600,000$

Billings on Construction in Process

$($To record the $2023$ progress billings$)$

$7,800,000$

$($To record the $2023$ cash collections$)$

Billings on Construction in Process

Revenue from Long$-$Term Contracts

$($To record the $2023$ revenue$)$

$($To record the $2023$ construction expenses$)$

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