Chapter 06 0 Saved Help Save & Exit Submit Check my work 10 Curtiss Construction Company, Inc., entered into a fixed-price contract with Axelrod Associates on July 1, 2021, to construct a four-story office building. At that time, Curtiss estimated that it would take between two and three years to complete the project. The total contract price for construction of the building is $4,720,000. The building was completed on December 31, 2023. Estimated percentage of completion, accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings to Axelrod under the contract were as follows: 3 points eBook Print Percentage of completion Costs incurred to date Estimated costs to complete Billings to Axelrod, to date At 12-31-2021 10% $ 371,000 3,339,000 732,000 At 12-31-2022 At 12-31-2023 60% 100% $3,024,000 $5, 102,000 2,016,000 0 2,410,000 4,720,000 Required: 1. Compute gross profit or loss to be recognized as a result of this contract for each of the three years. Curtiss concludes that the contract does not qualify for revenue recognition over time. 2. Assuming Curtiss recognizes revenue over time according to percentage of completion, comput gross profit or loss to be recognized in each of the three years. 3. Assuming Curtiss recognizes revenue over time according to percentage of completion, compute the amount to be shown in the balance sheet at the end of 2021 and 2022 as either cost in excess of billings or billings in excess of costs. Req 1 and 2 Req 3 1. Compute gross profit or loss to be recognized as a result of this contract for each of the three years. Curtiss concludes that the contract does not qualify for revenue recognition over time. 2. Assuming Curtiss recognizes revenue over time according to percentage of completion, compute gross profit or loss to be recognized in each of the three years. (Leave no cells blank - be certain to enter "0" wherever required. Loss amounts should be indicated with a minus sign.) Show less A Year Req 1 Gross Profit (Loss) Recognized ("Upon Completion") Req 2 Gross Profit (Loss) Recognized ("Over Time") $ 101,000 2021 2022 $ 2023 $ 1,040,000 (62,000) 978,000 $ Total project profit (loss) $ 101,000 Reg 1 and 2 Req3 > Req 1 and 2 Req3 Assuming Curtiss recognizes revenue over time according to percentage of completion, compute the amount to be shown in the balance sheet at the end of 2021 and 2022 as either cost in excess of billings or billings in excess of costs. 2021 2022 Balance Sheet (Partial) Current assets: Costs less loss in excess of billings Current liabilities: Billings in excess of costs and profit