Problem 6-12 (Algo) Long-term contract; revenue recognized over time vs. upon project completion; loss projected on entire project (LO6-9) Curtiss Construction Company, Inc., entered into a fixed-price contract with Axelrod Associates on July 1, 2021, to construct a four-story office building. At that time, Curtiss estimated that it would take between two and three years to complete the project. The total contract price for construction of the building is $4,900,000. The building was completed on December 31, 2023. Estimated percentage of completion, accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings to Axelrod under the contract were as follows: At 12-31-2022 60% Percentage of completion Costs incurred to date Estimated costs to complete Billings to Axelrod, to date At 12-31-2021 10% $ 374,000 3,366,000 735,000 $3,150,000 2,100,000 2,470,000 At 12-31-2023 100% $5,315,000 0 4,900,000 Required: 1. Compute gross profit or loss to be recognized as a result of this contract for each of the three years. Curtiss concludes that the contract does not qualify for revenue recognition over time. 2. Assuming Curtiss recognizes revenue over time according to percentage of completion, compute gross profit or loss to be recognized in each of the three years. 3. Assuming Curtiss recognizes revenue over time according to percentage of completion, compute the amount to be shown in the balance sheet at the end of 2021 and 2022 as either cost in excess of billings or billings in excess of costs. Complete this question by entering your answers in the tabs below. Reg 1 and 2 Reg 3 1. Compute gross profit or loss to be recognized as a result of this contract for each of the three years. Curtiss concludes that the contract does not qualify for revenue recognition over time. 2. Assuming Curtiss recognizes revenue over time according to percentage of completion, compute gross profit or loss to be recognized in each of the three years. (Leave no cells blank - be certain to enter "0" wherever required. Loss amounts should be indicated with a minus sign.) Show less Req 1 Gross Profit (Loss) Recognized ("Upon Completion") Req 2 Gross Profit (Loss) Recognized ("Over Time") Year 2021 2022 2023 Total project profit (loss) $ 0 $ 0 Complete this question by entering your answers in the tabs below. Reg 1 and 2 Reg 3 Assuming Curtiss recognizes revenue over time according to percentage of completion, compute the amount to be shown in the balance sheet at the end of 2021 and 2022 as either cost in excess of billings or billings in excess of costs. Balance Sheet (Partial) 2021 2022 Current assets: Costs less loss in excess of billings $ 0 $ 0 Current liabilities: Billings in excess of costs and profit $ 0 $ 0