18-3

Halfton Co. signed a $1 million fixed price contract to construct a building. The following cost information relates to the buildings construction at the end of each reporting year.

20x0 20x1 20x2 20x3

Costs incurred to date .............. $300,000 .................................................. $540,000 .................................................. $770,000 .................................................. $975,000

Expected remaining costs ........ 500,000 360,000 ................................... 330,000 -0-

Instructions: Determine the amount of profit or loss to be reported for the contract each year under:

1. The percentage of completion method.
2. The completed contract method.