Question - Assume Nortel Networks contracted to provide a customer with Internet infrastructure for $2,000,000. The project began in 2011 and was completed in 2012. Data relating to the contract are summarized below:
2011 2012
Costs incurred during the year $ 300,000 $ 1,575,000
Estimated costs to complete as of 12/31 1,200,000 0
Billings during the year 380,000 1,620,000
Cash collections during the year 250,000 1,750,000
Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2011 using the percentage-of-completion method.
Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2011 using the completed contract method.