Nielsen

During 2010, Nielsen Company started a construction job with a contract price of $1,600,000. The job was completed in 2012. The following information is available.
2010                      2011                          2012
Costs incurred to date                  $     400,000          $     825,000            $  1,070,000
Estimated costs to complete       $     600,000          $     275,000            $        –
Billings to date                               $     300,000          $     900,000            $  1,600,000
Collections to date                        $     270,000          $     810,000            $  1,425,000

A. Compute the amount of gross profit to be recognized each year assuming the percentage-of-completion method is used.

b. Prepare all necessary journal entries for 2011.

c. Compute the amount of gross profit to be recognized each year assuming the completed-contract method is used. (If no profit is recognized, please enter 0, do not leave any fields blank.)