Zamponi's Construction Company reports its income for tax purposes on a completed contract basis and income for financial statement purposes on a percentage-of completion basis. A record of construction activities for 2011 and 2012 follows:

General and administrative expenses for 2011 and 2012 were $60,000 for each year and are to be recorded as a period cost.
Instructions:
1. Calculate the income for 2011 and 2012 that should be reported for financial statement purposes.
2. Calculate the income for 2012 to be reported on a completed-contractbasis.

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Cost IncurredEstimated Cost Cost IncurredEstimated Cost to Complete Project Contract Price 2011 to Complete 2012 $1.450,000 ,700,000 850,000 1,000,000 $840,000 720,000 160,000 $560,000 880,000 480.000 $480,000 340,000 431,500 280,000 650,000 58,500 520,000