Exercise 6-19 (Algo) Long-term contract; revenue recognition over time and at a point in time (L06-9) Assume Nortel Networks contracted to provide a customer with Internet infrastructure for $2,550,000. The project began in 2021 and was completed in 2022. Data relating to the contract are summarized below: Costs incurred during the year Estimated costo to complete an of 12/31 Billings during the year Cash collection during the year 2021 2022 $ 344,000 $1,773,000 1,376,000 0 468,000 2,082,000 316,000 2,234,000 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. Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 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 numerator Choose denominator % completo to date Estimated costs to complete Estimated costs to complete 2021 344,000 $ 1,376,000 25.00% 2022 $ 2,550,000 + $ 637,500 400.00% $ + To date s 314,000 S Construction revenue Construction expense Gross profit (1018) 2021 Recognized in prior years 637,500 $ $ s Recognized in 2021 344,000 0 0 To date 2022 Recognized in prior years 2,550,000 S 637,000 s Construction revenue Construction expense Gross profit (los) Recognized in 2022 (1.913,000) 0 0 4. Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 202 assuming this project does not qualify for revenue recognition over time. Answer is not complete. Complete this question by entering your answers in the tabbelow. 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.) Revenue Gross Profit (Loss) 2021 2022 $ 2,550,000 $ 2,117,000 $ 0 0 Answer is not complete. 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 I Cash $ $ 316,000 Billings in excess of costs and profit 344,000 Accounts receivable 152,000 Current liabilities: Accounts payable * % 344,000 Check my work mode : This shows what is correct or incorrect for the work you have completed so far. It does not indicate com Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 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 Cash >$ 316,000 Billings in excess of costs and profit 344,000 Accounts receivable 152,000 Current liabilities Accounts payable 344,000