Assume Nortel Networks contracted to provide a customer with Internet infrastructure for $2,600,000. 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	$	348,000		$	1,995,000
Estimated costs to complete as of 12/31		1,392,000			0
Billings during the year		465,000			1,740,000
Cash collections during the year		395,000			1,810,000

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.) + % complete to date Choose numerator Actual costs to date 348,000 2,343,000 Percentages of completion Choose denominator Estimated total costs $ 1,740,000 $ 2,343,000 2021 2022 $ $ - - = = 20.00% 100.00% 2021 Recognized in prior years To date Recognized in 2021 $ Construction revenue Construction expense Gross profit (loss) 2022 Recognized in prior years To date Recognized in 2022 Construction revenue Construction expense Gross profit (loss)