Assume Nortel Networks contracted to provide a customer with Internet infrastructure for $2,450,000. 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	$	336,000		$	1,870,000
Estimated costs to complete as of 12/31		1,344,000			0
Billings during the year		446,000			1,710,000
Cash collections during the year		361,000			1,795,000

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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	$336,000		$1,680,000	=	20.00%
2022	$2,206,000		$2,206,000	=	100.00%
	2021
	To date	Recognized in prior years		Recognized in 2021
Construction revenue		$0
Construction expense	$(336,000)	$0		$(336,000)
Gross profit (loss)		$0
	2022
	To date	Recognized in prior years		Recognized in 2022
Construction revenue
Construction expense
Gross profit (loss)

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.