IT Technology enters into a contract with the federal government to create a system for the price of $ 16 million. IT receives $ 6.4 million when the contract is signed and the other $ 9.6 million upon completion of the project.
The government maintains control of the system during the creation process. IT estimates that $37,000 labor hours will be required to complete the product. During the current year $11,100 labor hours are used and during the following year, the remaining $25,900 hours were used.
What will be included in the journal entry at the end of the current year?
