On March 1, 2017, Sheffield Construction Company contracted to construct a factory building for Fabrik Manufacturing Inc. for a total contract price of $8,330,000. The building was completed by October 31, 2019. The annual contract costs incurred, estimated costs to complete the contract, and accumulated billings to Fabrik for 2017, 2018, and 2019 are given below: 2017 2018 2019
Contract costs incurred during the year $2,671,200 $2,193,000 $2,395,800
Estimated costs to complete the 3,688,800 2,395,800 0
contract at 12/31
Billings to Fabrik during the year 3,170,000 3,510,000 1,650,000
(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, 2017, 2018, and 2019. (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, 2017, 2018, and 2019.