Percentage-of-completion and completed contract methods of income recognition.

The Bechtel Construction Company agreed to build a warehouse for

$4,000,000. Expected and actual costs to construct the warehouse were as follows:

Year 1, $800,000; Year 2, $1,920,000; and Year 3. $480,000. The ttrm completed the warehouse in Year 3, Compute revenue, expense, and net income for Year 1. Year 2. and Year 3 using the percentage-of-completion method and the completed contract method.(Appendix)