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Assume Nortel Networks contracted to provide a customer with Internet infrastructure for $2,750,000. The project began in 2021 and was completed in 2022. Data relating

Assume Nortel Networks contracted to provide a customer with Internet infrastructure for $2,750,000. 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 $ 360,000 $ 2,155,000
Estimated costs to complete as of 12/31 1,440,000 0
Billings during the year 500,000 1,770,000
Cash collections during the year 445,000 1,825,000

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.

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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
2021 = 0
2022 = 0
2021
To date Recognized in prior years Recognized in 2021
Construction revenue $0
Construction expense $0
Gross profit (loss) $0
2022
To date Recognized in prior years Recognized in 2022
Construction revenue $0
Construction expense $0
Gross profit (loss) $0

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. (Loss amounts should be indicated with a minus sign.)

Revenue Gross Profit (Loss)
2021
2022

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.

Balance Sheet (Partial)
At December 31, 2021
Current assets:
Current liabilities:

repare 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.

Balance Sheet (Partial)
At December 31, 2021
Current assets:
Current liabilities:

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