Assume Nortel Networks contracted to provide a customer with Internet infrastructure for $2,810,000. The project began in 2021 and was completed in 2022. Data relating to the contract are summarized below: 3.56 Costs incurred during the year Estimated costs to complete as of 12/31 Billings during the year Cash collection during the year 2021 2022 $368,000 $1,881,000 1,472,000 0 516,000 2,294,000 312,000 2,498,000 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 quality 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. nces Required 1 Required 2 Required 3 Required 4 39 Compute the amount of revenue and gross profit or loss to be recognized in 2021 and 2022 assuming Nortel recognizes revenue overt according to percentage of completion. (Loss amounts should be indicated with a minus sign. Use percentages as calculated and round 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 es Construction revenue Construction expenso Gross profit (108) $ $ $ 0 0 0 2022 Recognized in prior years To date Recognized in 2022 $ 0 Construction revenue Construction expense Gross profit (los) 0 $ Required Required 2 > nt Required 1 Required 2 Required 3 Required 4 Compute the amount of revenue and gross profit or loss to be recognized in 2021 and 2023 qualify for revenue recognition over time. (Loss amounts should be indicated with a minus ences Revenue Gross Profit (Loss) 2021 2022 Required Require Prepare a partial balance sheet to show how the information related to this contract would be presen assuming Nortel recognizes revenue over time according to percentage of completion. Balance Sheet (Partial) At December 31, 2021 & Current assets: Current liabilities: 3.02 Required 1 Required 2 Required 3 Required 4 Prepare a partial balance sheet to show how the information related to this contract would be prese assuming this project does not qualify for revenue recognition over time. Balance Sheet (Partial) At December 31, 2021 Current assets: ces Current liabilities:
