Westel is a builder of large digital networks. In the midst of the high-tech euphoria, the company bid and won a $50,000,000 contract to build a network for the country of Elbonia. Details on the project over the past three years are as follows:

Required:
Compare the amount of revenue, cost of goods sold (COGS), and gross profit (or loss) to be recognized in each of the three years. The company uses the percentage of completion method to account for long-term contracts, Record your answer in the following table,

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Year 1 Year 3 (in $000's) Cumulative costs incurred Additional costs to complete estimated at Year 2 12,000 S 30,000 55,000 20,000 48,000 year-end Amounts invoiced to client in each year Cash collected 8,000 7,000 19,000 18,000 23,000 25,000 (in $000's) Revenue -COGS - Expected loss (recovery) = Gross profit (loss) Year 1 Year 2 Year 3 Total 50,000 55,000 12,000 (8,000) (5,000)