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Assume Nortel Networks contracted to provide a customer with Internet infrastructure for $2,400,000. The project began in 2018 and was completed in 2019. Data relating to the contract are summarized below: 2019 $1,850,000 Costs incurred during the year Estimated costs to complete as of 12/31 Billings during the year Cash collections during the year 2018 $ 332,000 1,328,000 441,000 266,000 1,700,000 1,790,000 Required: 1. Compute the amount of revenue and gross profit or loss to be recognized in 2018 and 2019 assuming Nortel recognizes revenue over time according to percentage of completion. 2. Compute the amount of revenue and gross profit or loss to be recognized in 2018 and 2019 assuming this project does not qualify for revenue recognition over time. 3. Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2018 assuming Nortel recognizes revenue over time according to percentage of completion. 4. Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2018 assuming this project does not qualify for revenue recognition over time. Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Compute the amount of revenue and gross profit or loss to be recognized in 2018 and 2019 assuming Nortel recognizes revenue over time according to percentage of completion. (Loss amounts should be indicated with a minus sign. Use percentages as calculated and rounded in the table below to arrive at your final answer.) Choose numerator % complete to date Percentages of completion Choose denominator Estimated total costs $ 1,660,000 Actual costs to date 332,000 2018 $ - 20.00% 0 2019 2018 Recognized in prior years To date Recognized in 2018 $ 0 Construction revenue Construction expense Gross profit (loss) $ 0 $ 0 2019 Recognized in prior years To date Recognized in 2019 $ 0 Construction revenue Construction expense Gross profit (loss) $ 0 $ 0 Compute the amount of revenue and gross profit or loss to be recognized in 2018 and 2019 assuming this project does not qualify for revenue recognition over time. (Loss amounts should be indicated with a minus sign.) Revenue Gross Profit (Loss) $ 0 2018 $ 0 2019 $ 2,400,000 Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2018 assuming Nortel recognizes revenue over time according to percentage of completion. Balance Sheet (Partial) At December 31, 2018 Current assets: $ 175,000 Accounts receivable Costs and profit in excess of billings 39,000 Current liabilities: Billings in excess of costs 109,000 Required 1 Required 2 Required 3 Required 4 Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2018 assuming this project does not qualify for revenue recognition over time. Balance Sheet (Partial) At December 31, 2018 Current assets: Current liabilities
