In 2013 Tarlo Company agrees to construct a highway for Brice

County over a three-year period (2013 through 2015). The contract

price is $1,200,000 and the construction costs (both actual and

estimated) total $705,000 for the three years. The percentage

completed at the end of each year is as follows: 2013, 20%; 2014,

75%; 2015, 100%.

Required

1. Prepare a schedule showing the amount of gross profit that Tarlo

Company recognizes each year using the percentage-of completion

method.

2. Prepare a schedule showing the amount of gross profit that Tarlo

Company recognizes each year using the completed contract

method.