Curtiss Construction Company, Inc., entered into a fixed-price contract with Axelrod Associates on July 1, 2011, to construct a four-story office building. At that time, Curtiss estimated that it would take between two and three years to complete the project. The total contract price for construction of the building is $4,000,000. Curtiss appropriately accounts for this contract under the completed contract method in its financial statements. The building was completed on December 31, 2013. Estimated percentage of completion, accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings to Axelrod under the contract were as follows:

Required:
1. Prepare schedules to compute gross profit or loss to be recognized as a result of this contract for each of the three years.
2. Assuming Curtiss uses the percentage-of-completion method of accounting for long-term construction contracts, compute gross profit or loss to be recognized in each of the three years.
3. Assuming the percentage-of-completion method, compute the amount to be shown in the balance sheet at the end of 2011 and 2012 as either cost in excess of billings or billings in excess ofcosts.

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At 12-31-11At 12-31-12At 12-31-13 100% 60 Percentage of completion Costs incurred to date Estimated costs to complete 31,50,00017,00,00 Billings to Axelrod. to date | 7.20.000| 21.70.0001 36.00.000 S 350000S 2500000 $ 4250000