Assume Nortel Networks contracted to provide a customer with Internet infrastructure for $2,000,000. 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 $ 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 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.)

Percentages of completion
	Choose numerator		Choose denominator	=	% complete to date
	Actual costs to date		Estimated total costs
2016	$300,000		$1,500,000	=	20.00%
2017			$1,875,000	=	%

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

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		$0
2017		$125,000