2013, Westgate Construction Company entered into a contract to prepare a road for Santa Clara County for $10,000,000. The road was completed in 2015. Information related to the contract is as given:
2013 2014 2015
Cost incurred during the year $ 2,291,000 $ 3,555,000 $ 2,259,400
Estimated costs to complete as of year-end 5,609,000 2,054,000 0
Billings during the year 1,900,000 3,946,000 4,154,000
Cash collections during the year 1,710,000 3,500,000 4,790,000
Westgate uses percentage-of-completion method of accounting for long-term construction contracts.
Required:
1. Evaluate amount of gross profit (loss) to be recognized in each of three years.