Assume Nortel Networks contracted to provide a customer with Internet infrastructure for $2,400,000. The project began in 2021 and was completed in 2022. Data relating to the contract are summarized below: 2021 2022 Costs incurred during the year $ 332,000 $1,850,000 Estimated costs to complete as of 12/31 1,328,000 0 Billings during the year 441,000 1,700,000 Cash collections during the year 351,000 1,790,000 Required: 1. Compute the amount of revenue and gross profit or loss to be recognized in 2021 and 2022 assuming Nortel recognizes revenue over time according to percentage of completion. 2. Compute the amount of revenue and gross profit or loss to be recognized in 2021 and 2022 assuming this project does not qualify for revenue recognition over time. 3. Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2021 assuming Nortel recognizes revenue over time according to percentage of completion. 4. Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2021 assuming this project does not qualify for revenue recognition over time. Required 1 Required 2 Required 3 Required 4 Compute the amount of revenue and gross profit or loss to be recognized in 2021 and 2022 assuming Nortel recognizes revenue over time according to percentage of completion. (Loss amounts should be indicated with a minus sign. Use percentages as calculated and rounded in the table below to arrive at your final answer.) Percentages of completion Choose numerator Choose denominator % complete to date Actual costs to date Estimated total costs 2021 0 2022 0 + + + 2021 Recognized in prior years To date Recognized in 2021 0 Construction revenue Construction expense Gross profit (loss) $ $ $ 0 o 2022 Recognized in prior years To date Recognized in 2022 Construction revenue Construction expense Gross profit (loss) $ $ $ 0 0 0 Required 1 Required 2 Required 3 Required 4 Compute the amount of revenue and gross profit or loss to be recognized in 2021 and 2022 assuming this project does not qualify for revenue recognition over time. (Loss amounts should be indicated with a minus sign.) Revenue Gross Profit (Loss) 2021 2022 Required 1 Required 2 Required 3 Required 4 Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2021 assuming Nortel recognizes revenue over time according to percentage of completion. Balance Sheet (Partial) At December 31, 2021 Current assets: Current liabilities: Required 1 Required 2 Required 3 Required 4 Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2021 assuming this project does not qualify for revenue recognition over time. Balance Sheet (Partial) At December 31, 2021 Current assets: Current liabilities
