Zamponi's Construction Company reports its income for tax purposes on a completedcontract basis and income for financial statement purposes on a percentage of completion basis. A record of construction activities for 2002 and 2003 follows:

General and administrative expenses for 2002 and 2003 were \($60,000\) for each year and are to be recorded as a period cost.
Instructions:
1 . Calculate the income for 2002 and 2003 that should be reported for financial statement purposes.
2. Calculate the income for 2003 to be reported on a completed-contract basis.

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Project Contract Price Cost Incurred- 2002 Estimated Cost to Complete 2003 Cost Incurred- Estimated Cost to Complete ABCD $1,450,000 $840,000 $560,000 $480,000 $ 0 1,700,000 720,000 880,000 340,000 650,000 850,000 160,000 480,000 431,500 58,500 1,000,000 280,000 520,000