* P18-11 (Long-Term Contract with Interim Loss) On March 1, 2014, Pechstein Construction Company
contracted to construct a factory building for Fabrik Manufacturing Inc. for a total contract price of
$8,400,000. The building was completed by October 31, 2016. The annual contract costs incurred, estimated
costs to complete the contract, and accumulated billings to Fabrik for 2014, 2015, and 2016 are given below.
	2014	2015	2016
Contract costs incurred during the year	$ 2,880,000	$ 2,230,000	$ 2,190,000
Estimated costs to complete the contract at 12/31	3,520,000	2,190,000	0
Billings to Fabrik during the year	3,200,000	3,500,000	1,700,000
Instructions
(a) Using the percentage-of-completion method, prepare schedules to compute the profit or loss to be
recognized as a result of this contract for the years ended December 31, 2014, 2015, and 2016. (Ignore
income taxes.)
(b) Using the completed-contract method, prepare schedules to compute the profit or loss to be recognized
as a result of this contract for the years ended December 31, 2014, 2015, and 2016. (Ignore
incomes taxes.)