On June 15, 2020, Lion Construction signed a $ 360,000 contract to build a small building. Lion estimated that the total cost would be $ 320,000. Construction started immediately because the required completion date was August 31, 2021. Lions relevant data relating to this construction project were as follows:

2020 2021

Actual costs incurred $ 120,000 $ 204,000

Estimated costs to complete 200,000 -0-

Progress billings 112,000 248,000

Collections 110,000 250,000

Instructions (show all supporting calculations)

Calculate how much gross profit that Lion should recognize each year, assuming:

Method Used For 2020 For 2021

a) Completed contract

b) Percentage-of-completion