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 2001?
2. How much revenue should be reported in 2002?
3. How much revenue should be reported in 2003?
4. How much cost was incurred in 2003?
5. What are the total costs on the contract?
6. What would be the gross profit for 2002 if the cost-to-cost percentage-ofcompletion method were used rather than the output measure? (Ignore the revenue amount shown for 2001 and gross profit amount reported for 2002.

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2001 2002 2003 Costs incurred during year Estimated cost to complete. $200,000 450,000 $250,000 190,000 ? Recognized revenue 220,000 > Gross profit on contract ? 10,000 0 P $(10,000) Contract price 850,000