On January 1, 2020, Curtis Construction Ltd. started a construction project for $ 4,500,000. Relevant data for 2020 and 2021 are as follows:

2020 2021 Current year construction costs $ 3,300,000 $ 620,000 Estimated remaining costs to complete 600,000 -0- Current year billings 3,100,000 1,400,000 Current year collections 3,000,000 1,500,000

Required:

1. For 2020 and 2021, calculate the following for both the completed contract and percentage of completion method (8 marks):

1. Gross Profit
2. Construction in progress year end balance
3. Cost in excess of billings (Billings in Excess of Costs)

2. Briefly explain when the completed contract method would be used instead of the percentage of completion (2 marks).