Assume Nortel Networks contracted to provide a customer withInternet infrastructure for $2,650,000. The project began in 2016and was completed in 2017. Data relating to the contract aresummarized below:

		2016			2017
Costs incurred during the year	$	352,000		$	2,025,000
Estimated costs to complete as of 12/31		1,408,000			0
Billings during the year		470,000			1,750,000
Cash collections during the year		276,000			1,815,000

Required:

1.	Compute the amount of revenue and gross profit or loss to berecognized in 2016 and 2017 assuming Nortel recognizes revenue overtime according to percentage of completion. (Usepercentages as calculated and rounded in the table below to arriveat your final answer. Losses and expenses should be indicated witha minus sign.)

      

      

      

2.	Compute the amount of revenue and gross profit or loss to berecognized in 2016 and 2017 assuming this project does not qualifyfor revenue recognition over time.

      

3.	Prepare a partial balance sheet to show how the informationrelated to this contract would be presented at the end of 2016assuming Nortel recognizes revenue over time according topercentage of completion.

      

4.	Prepare a partial balance sheet to show how the informationrelated to this contract would be presented at the end of 2016assuming this project does not qualify for revenue recognition overtime.