Extra credit: long$-$term contracts Question $1$:

Assume Spartan Networks contracted to provide a customer with Internet infrastructure for

$$6,000,000.$ The project began in $2022$ and was completed in $2024.$ Data relating to the contract

are summarized below:

Required:

Prepare the journal entries for cost of construction, billings, and cash collection in

years $2022,2023,$ and $2024.$

Compute the amount of revenue and gross profit or loss to be recognized in $2022,$

$2023,$ and $2024$ assuming Spartan recognizes revenue over time according to

percentage of completion.

Compute the amount of revenue and gross profit or loss to be recognized in $2022,$

$2023,$ and $2024$ assuming this project does not qualify for revenue recognition over

time.

Prepare a partial balance sheet to show how the information related to this contract

would be presented at the end of $2022$ assuming Spartan recognizes revenue over time

according to percentage of completion.

Prepare a partial balance sheet to show how the information related to this contract

would be presented at the end of $2022$ assuming this project does not qualify for

revenue recognition over time.

Question $1$:

Assume Spartan Networks contracted to provide a customer with Internet infrastructure for

$$6,000,000.$ The project began in $2022$ and was completed in $2024.$ Data relating to the contract

are summarized below:

Required:

Prepare the journal entries for cost of construction, billings, and cash collection in

years $2022,2023,$ and $2024.$

Compute the amount of revenue and gross profit or loss to be recognized in $2022,$

$2023,$ and $2024$ assuming Spartan recognizes revenue over time according to

percentage of completion.

Compute the amount of revenue and gross profit or loss to be recognized in $2022,$

$2023,$ and $2024$ assuming this project does not qualify for revenue recognition over

time.

Prepare a partial balance sheet to show how the information related to this contract

would be presented at the end of $2022$ assuming Spartan recognizes revenue over time

according to percentage of completion.

Prepare a partial balance sheet to show how the information related to this contract

would be presented at the end of $2022$ assuming this project does not qualify for

revenue recognition over time.