Curtiss Construction Company, Inc., entered into a fixed-price contract with Axelrod Associates on July 1, 2018, to construct a four-story office building. At that time, Curtiss estimated that it would take between two and three years to complete the project. The total contract price for the construction of the building is $4,720,000. Curtiss concludes that the contract does not qualify for revenue recognition over time. The building was completed on December 31, 2020. Estimated percentage of completion, accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings to Axelrod under the contract were as follows
At 12-31-2018 At 12-31-2019 At 12-31-2020
Percentage of completion 10% 60% 100%
Costs incurred to date $ 410,000 $2,980,000 $5,102,000
Estimated costs to complete 3,270,000 2,060,000 0
Billings to Axelrod, to date 900,000 2,410,000 4,720,000
Required
1. Compute gross profit or loss to be recognized as a result of this contract for each of the three years
2. Assuming Curtiss recognizes revenue over time according to the percentage of completion, compute gross profit or loss to be recognized in each of the three years
3. Assuming Curtiss recognizes revenue over time according to the percentage of completion, compute the amount to be shown in the balance sheet at the end of 2018 and 2019 as either cost in excess of billings or billings in excess of costs.