Chicago contractors got$5,400,000 contract to construct a school building for the City of Chicago.

Chicago contractors got $5,400,000 contract to construct a school building for the City of Chicago. Work on this contract began in 2013 and the financial data pertaining to this contract is available here.

Cost incurred till Dec.31, 2013                     $1,080,000

Billings made to City                                     $1,000,000

Amount collected from City                           $ 750,000

The estimated future cost to complete this contract is $3,240,000.

(a) Prepare Chicago contractors 2013 journal entries using completed contract method.

(b) Show how the contract accounts will appear in the Balance Sheet of Chicago Contractors on 12/31/2013.