Assume Nortel Networks contracted to provide a customer with Internet infrastructure for $2,750,000. The project began in 2016 and was completed in 2017. Data relating to the contract are summarized below:

		2016			2017
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		280,000			1,825,000

Required:

1.

Compute the amount of revenue and gross profit or loss to be recognized in 2016 and 2017 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. Losses and expenses should be indicated with a minus sign.) 1

2016	2017
Estimated total gross profit (loss)

Percentages of completion
	Choose numerator		Choose denominator	=	% complete to date
2016				=
2017				=

2016
	To date	Recognized in prior years	Recognized in 2016
Construction revenue			$0
Construction expense			$0
Gross profit (loss)			$0
2017
	To date	Recognized in prior years	Recognized in 2017
Construction revenue			$0
Construction expense			$0
Gross profit (loss)			$0

2.

Compute the amount of revenue and gross profit or loss to be recognized in 2016 and 2017 assuming this project does not qualify for revenue recognition over time.

	Revenue	Gross Profit (Loss)
2016
2017

3.

Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2016 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 2016 assuming this project does not qualify for revenue recognition over time.

Please Help, and use the formatted boxes. Thanks!!