Smokey International Inc. recently acquired the Kurtz Builders Company. Kurtz has incomplete accounting records. On one particular project, only the information below is available.

Because the information is incomplete, you are asked the following questions assuming the percentage-of-completion method is used, an output measure is used to estimate the percentage completed, and revenue is recorded using the actual cost approach.

1. How much gross profit should be reported in 2010?

2. How much revenue should be reported in 2011?

3. How much revenue should be reported in 2012?

4. How much cost was incurred in 2012?

5. What are the total costs on the contract?

6. What would be the gross profit for 2011 if the cost-to-cost percentage-of-completion method were used rather than the output measure?

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2010 2011 2012 Costs Incurred during year Estimated cost to complete Recognized revenue Gross profit on contract . Contract price $200,000 450,000 220,000 $250,000 90,000 0,000 (10,000) 850,000