E$17\mathrm{.}32($LO $4)($Contract Costs, Collectibility$)$ Refer to the information in E$17\mathrm{.}31.$

Instructions

a$.$ Does the accounting for capitalized costs change if the contract is for $1$ year rather than $3$ years? Explain.

b$.$ Dan's Demolition is a startup company; as a result, there is more than insignificant uncertainty about Dan's ability to make the $6-$month payments on time. Does this uncertainty affect the amount of revenue to be recognized under the contract? Explain.

$*$E$17\mathrm{.}33($LO $5,6)($Recognition of Profit on Long$-$Term Contracts$)$ During $2025,$ Nilsen Company started a construction job with a contract price of $$1,600,000.$ The job was completed in $2027.$ The following information is available.

$\backslash$table$[[,2025,2026,2027],[$Costs incurred to date,$$400,000,$$$825,000,$$$1,070,000$