Solution-Compute the amount of gross profit or loss

Compute the amount of gross profit or loss

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Reference no: EM132001248

Question - Assume Nortel Networks contracted to provide a customer with Internet infrastructure for $2,000,000. The project began in 2013 and was completed in 2014. Data relating to the contract are summarized below:

	2013	2014
Costs incurred during the year	$300,000	$1,575,000
Estimated costs to complete as of 12/31	1,200,000	0
Billings during the year	380,000	1,620,000
Cash collections during the year	250,000	1,750,000

Required:

1. Compute the amount of gross profit or loss to be recognized in 2013 and 2014 using the percentage-of-completion method.

2. Compute the amount of gross profit or loss to be recognized in 2013 and 2014 using the completed contract method.

3. Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2013 using the percentage-of-completion method.

4. Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2013 using the completed contract method.

Reference no: EM132001248

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Compute the amount of gross profit or loss

Reference no: EM132001248

Reference no: EM132001248

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