During 2023, Sheridan Corporation started a construction job with a contract price of $4.34 million. Sheridan ran into severe technical difficulties during construction but managed to complete the job in 2025. The contract is non-cancellable. Under the terms of the contract, Sheridan sends billings as revenues are earned. Billings are non-refundable. The following information is available: Costs incurred to date Estimated costs to complete (a) (61) 2024 2023 Date Account Titles and Explanation 2024 $ 620,000 3,255,000 (To record revenues) 2024 Prepare the year-end journal entries for 2024 to record revenues and expenses from the contract, assuming the percentage-of- completion method is used. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries) (To record construction expenses) $2,170,000 2,170,000 2025 $4,240,000 -0- Debit Credit

Contract costing is about tracing particular costs related to a particular contract entered into with the customer. It is one of the forms of job order costing. It is useful in long-term contracts at the most. It is seen that substantial time is required…