Assume Nortel Networks contracted to provide a customer with Internet infrastructure for $2,000,000. The project began in 2018 and was completed in 2019. Data relating to the contract are summarized below:

2018			2019
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 revenue and gross profit or loss to be recognized in 2018 and 2019, assuming Nortel recognizes revenue over time according to the percentage of completion. 2. Compute the amount of revenue and gross profit or loss to be recognized in 2018 and 2019, assuming this project does not qualify for revenue recognition over time. 3. Prepare a partial statement of financial position to show how the information related to this contract would be presented at the end of 2018, assuming Nortel recognizes revenue over time according to the percentage of completion. 4. Prepare a partial statement of financial position to show how the information related to this contract would be presented at the end of 2018, assuming this project does not qualify for revenue recognition over time.

Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Compute the amount of revenue and gross profit or loss to be recognized in 2018 and 2019 assuming Nortel recognizes revenue over time according to percentage of completion. (Use percentages as calculated and rounded in the table below to arrive at your final answer. Loss amounts should be indicated with a minus sign.) % complete to date Choose numerator Actual costs to date $ 300,000 $ 1,875,000 Percentages of completion Choose denominator Estimated total costs $ 1,500,000 1,875,000 2018 2019 20.00% 100.00% + 2018 Recognized in prior years To date Recognized in 2018 $ 400,000 $ 400,000 Construction revenue Construction expense Gross profit (loss) $ 300,000 $ 0 $ 300,000 100,000 $ 100,000 $ To date 2019 Recognized in prior years 400,000 Recognized in 2019 $ 2,000,000 $ $ 1,600,000 Construction revenue Construction expense Gross profit (loss) $ $ $ 1,575,000 1,875,000 125,000 300,000 100,000 $ $ 25,000 Required 1 Required 2 Required 3 Required 4 Compute the amount of revenue and gross profit or loss to be recognized in 2018 and 2019 assuming this project does not qualify for revenue recognition over time. (Loss amounts should be indicated with a minus sign.) 2018 Revenue $ 0 $ 2,000,000 Gross Profit (Loss) $ 0 $ 125,000 2019 Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Prepare a partial statement of Financial Position to show how the information related to this contract would be presented at the end of 2018 assuming Nortel recognizes revenue over time according to percentage of completion. Statement of Financial Position as of December 31, 2018 Current assets: Contract asset Accounts receivable 20,000 130,000 Current liabilities: Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Prepare a partial statement of Financial Position to show how the information related to this contract would be presented at the end of 2018 assuming this project does not qualify for revenue recognition over time. Statement of Financial Position as of December 31, 2018 Current assets: Accounts receivable $ 130,000 Current liabilities: Billings in excess of costs