Smokey International Inc. recently acquired the Kurtz Builders Company. Kurtz has incomplete accounting records. On one particular project, only the information below is available.

Because the information is incomplete, you are asked the following questions assuming the percentage-of-completion method is used, an output measure is used to estimate the percentage completed, and revenue is recorded using the actual cost approach.
1. How much gross profit should be reported in 2012?
2. How much revenue should be reported in 2013?
3. How much revenue should be reported in 2014?
4. How much cost was incurred in 2014?
5. What are the total costs on the contract?
6. What would be the gross profit for 2013 if the cost-to-cost percentage-of-completion method were used rather than the output measure?

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2012 2013 2014 Costs incurred during year $200,000 $250,000 50,000 190,000 s Alin,o 220,000 Recognized revenue Gross profit on contract. 10,000 (0,ooo 850,000