(Long-Term Contract with Interim Loss)

On May 1, 2020, Jackson Construction Company contracted to

construct a factory building for a total contract price of $9,600,000. The building was completed by May 31, 2022. The annual

contract costs incurred, estimated costs to complete the contract, and accumulated billings to Fabrik for 2020, 2021, and 2022

are

given below.

2020

2021

2022

Contract costs incurred during the year

$3,400,000

$2,400,000

$2,900,000

Estimated costs to complete the contract at 12/31

4,600,000

3,100,000

-0-

Billings

1,200,000 4,100,000 4,300,000

Instructions

(a)

Using the percentage-of-completion method, prepare schedules to compute the profit or loss to be recognized as a

result of this contract for the years ended December 31, 2020, 2021, and 2022. (Ignore income taxes.)

(b)

Using the completed-contract method, prepare schedules to compute the profit or loss to be recognized as a result of

this contract for the years ended December 31, 2020, 2021, and 2022. (Ignore incomes taxes.)