Assume nortel networks contracted to provide a customer

Reference no: EM13589209

Assume Nortel Networks contracted to provide a customer with Internet infrastructure for $2,000,000. The project began in 2013 and was completed in 2014. Data relating to the contract are summarized below:

	2013		2014
Costs incurred during the year	$	300,000	$	1,575,000
Estimated costs to complete as of 12/31		1,200,000		0
Billings during the year		380,000		1,620,000
Cash collections during the year		250,000		1,750,000

Required:

Compute the amount of gross profit or loss to be recognized in 2013 and 2014 using the percentage-of-completion method.

Compute the amount of gross profit or loss to be recognized in 2013 and 2014 using the completed contract method.

Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2013 using the percentage-of-completion method.

4.	Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2013 using the completed contract method.

Reference no: EM13589209

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