(Answered) Assume nortel networks contracted to provide a customer

Accounting

Assume Nortel Networks contracted to provide a customer with Internet infrastructure for $2,810,000. The project began in 2016 and was completed in 2017. Data relating to the contract are summarized below:

	2016	2017
Costs incurred during the year	$ 368,000	$ 2,205,000
Estimated costs to complete as of 12/31	1,472,000	0
Billings during the year	525,000	1,790,000
Cash collections during the year	284,000	1,835,000

Required:

Compute the amount of revenue and gross profit or loss to be recognized in 2016 and 2017 assuming Nortel recognizes revenue over time according to percentage of completion.

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