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:

Required:
1. Compute the amount of gross profit or loss to be recognized in 2013 and 2014 using the percentage-of-completion method.
2. Compute the amount of gross profit or loss to be recognized in 2013 and 2014 using the completed contract method.
3. 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 contractmethod.

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2013 2014 Costs incurred during the year Estimated costs to complete as of 12/311,200,0000 Billings during the year Cash collections during the year 250,000 1,750,000 380,000 1,620,000