Assume Nortel Networks contracted to provide a customer with Internet infrastructure for $2,910,000. 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	$	376,000		$	2,265,000
Estimated costs to complete as of 12/31		1,504,000			0
Billings during the year		535,000			1,810,000
Cash collections during the year		500,000			1,845,000

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.

X Answer is complete but not entirely correct. 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 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 denominator Choose numerator = % complete to date Actual costs to date Estimated total costs 2021 $ $ 20.00% 376,000 2,265,000 1,880,000 2,265,000 X = 2022 $ $ 100.00% 2021 To date Recognized in prior years Construction revenue $ 0 Recognized in 2021 500,000 (376,000) 124,000 $ 500,000 $ (376,000) $ 124,000 X $ Construction expense Gross profit (loss) 0$ $ 0 $ To date $ Construction revenue Construction expense Gross profit (loss) 2022 Recognized in prior years 500,000 X $ (376,000) $ 206,000 2,500,000 $ (2,265,000) X $ 63,000 $ Recognized in 2022 2,000,000 (1,889,000) (143,000) $ $ X Answer is complete but not entirely correct. 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 2021 and 2022 assuming this project does not qualify for revenue recognition over time. (Loss amounts should be indicated with a minus sign.) 2021 Gross Profit Revenue (Loss) $ 0$ (376,000) X $ 2,910,000 $ 645,000 X 2022 X Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 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: $ Accounts receivable Costs and profit in excess of billings 35,000 47,000 Current liabilities: Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 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. Balance Sheet (Partial) At December 31, 2021 Current assets: Accounts receivable $ 35,000 Current liabilities: Billings in excess of costs and profit 159,000