Assume Nortel Networks contracted to provide a customer with Internet infrastructure for $2,000,000. The project began in 2013 and was completed in 2014. Data relating to the contract are summarized below:

	2013			2014
Costs incurred during the year	$	300,000		$	1,575,000
Estimated costs to complete as of 12/31		1,200,000			0
Billings during the year		380,000			1,620,000
Cash collections during the year		250,000			1,750,000

Required:

1.

Compute the amount of gross profit or loss to be recognized in 2013 and 2014 using the percentage-of-completion method.

2.

Compute the amount of gross profit or loss to be recognized in 2013 and 2014 using the completed contract method.

3.

Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2013 using the percentage-of-completion method.

4.	Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2013 using the completed contract method.