Required:

Compute the amount of revenue and gross profit or loss to be recognized in Year $1$ and Year $2,$ assuming Miami FiberOptics recognizes revenue over time according to percentage of completion.

Compute the amount of revenue and gross profit or loss to be recognized in Year $1$ and Year $2,$ assuming this project does not qualify for revenue recognition over time.

Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of Year $1,$ assuming Miami FiberOptics recognizes revenue over time according to percentage of completion.

Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of Year $1,$ assuming this project does not qualify for revenue recognition over time.