1) For each of the following situations, identify the appropriate method of revenue recognition and the amount of gross profit to be recognized in 2001. a. b. A company entered into a contract to construct a building for a fee of $650,000. Construction began in 2001 and will be completed in 2003. Estimated cost of the project is $450,000. During 2001 costs of $180,000 were incurred. All costs and revenues can be reasonably estimated. A company sold goods for $100,000 during 2001. Of this amount, $60,000 was cash and $40,000 was on account. The company collected $20,000 of the sales on account during 2001. The cost of the goods sold was $70,000. C. d. Assume the same facts as in (a) except that costs are unable to be estimated with any degree of reliability. The following data relates to a firm that allows payments to be made over an extended period of time. Ultimate collection of the sales revenue is not reasonably estimable. Total credit sales for the year Gross profit percentage Collections on account $100,000 40% $60,000 [8]