DunnEllis began work on a government contract at the start of 2019. The contract is to construct a small apartment complex for $5,000,000. Initial construction costs were estimated to be $4,000,000. Information during the construction period was:

2019 2020

Costs incurred this year $1,600,000 $2,550,000

Estimated cost to complete as of 12/31/19 2,400,000 -0-

Billings to the government during the year 1,720,000 3,280,000

Cash collected during the year 1,500,000 3,500,000

(b) How much revenue and income on the contract would be reported for each year assuming Completed contract method? (Must show calculations):

c) Assume that in year 2019 everything is the same except the costs to complete at 12/31/19 are $3,800,000. What would be the new income for 2019 only and using Percentage-of-completion method? (Must show calculations):