Gow Constructors, Inc., has consistently used the input method based on costs incurred to measure the progress toward completion of a long-term construction contract. In Year 1, Gow started work on an \$18 million construction contract that was completed in Year 2. The following information was taken from Gow's Year 1 accounting records: What amount of gross profit should Gow have recognized in Year 1 on this contract? $900,000$1,400,000$1,200,000$600,000 An entity recognizes revenue from a long-term contract over time. However, early in the performance of the contract, it cannot reasonably measure the outcome, but it expects to recover the costs incurred. Revenue should be recognized based on The completed-contract method. A zero profit margin. A straight-line calculation. The output method. Fact Pattern: Data pertaining to Pell Co.'s long-term construction jobs, which commenced during Year 1, are as follows: If Pell used the input method based on costs incurred to measure its progress toward completion of the project, what amount of gross profit (loss) would Pell report in its Year 1 income statement? $40,000 $20,000 $22,500 $(20,000) A software developer enters into a contract with a new customer to sell a software license and perform installation services. The entity sometimes sells the license and installation services separately. The installation service is routinely performed by other entities and does not significantly modify the software. The entity historically provided to new customers technical support for a 5-year period for no additional consideration. The contract does not specify the terms or conditions for the technical support services. Under ASC 606, which of the following represents the performance obligations identified by the entity in this contract? Two performance obligations: (1) Software license and (2) installation services. One performance obligation: (1) Software license plus installation services. Two performance obligations: (1) Software license plus installation services and (2) technical support services. Three performance obligations: (1) Software license, (2) installation services, and (3) technical support services. Howard Co. had the following first-year amounts for a $7,000,000 construction contract: What gross profit (loss) is recognized using the input method based on costs incurred to measure progress toward completion of the contract? $1,750,000 $(200,000) $800,000 $(1,000,000)