The Miller Company won a contract to build a shopping center at a price of \($240\) million. The following schedule details the estimated and actual costs of construction and the actual cash collections under the contract:

Required
1. Prepare an income statement for the Miller Company for each year assuming that the company recognizes revenue under the completed contract method.
2. Prepare an income statement for the Miller Company for each year assuming that the company recognizes revenue under the percentage-of-completion method.
3. Which set of income statements best reflects the actual performance of the Miller Company? Why?

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Year 1 Year 2 Year 3. Year 4 Estimated (Actual) Costs of Construction $ 40,000,000 60,000,000 70,000,000 30,000,000 $200,000,000 Cash Collections from Customer $ 48,000,000 60,000,000 60,000,000 72,000,000 $240,000,000