On February 1,2007, Nance Contractors agreed to construct a building at a contract price of $6,000,000. Nance estimated total construction costs would be $4,000,000 and the project would be finished in 2009. Information relating to the costs and billings for this contract is as follows:

2007                2008                2009

Total costs incurred to date                $1,500,000     $2,640,000     $4,600,000

Estimated costs to complete                 2,500,000       1,760,000            -0-

Customer billings to date                     2,200,000       4,000,000       5,600,000

Collections to date                               2,000,000       3,500,000       5,500,000

Instructions

Fill in the correct amounts on the following schedule. For percentage-of-completion accounting and for completed-contract accounting, show the gross profit that should be recorded for 2007.

Percentage-of-Completion                 Completed-Contract

Gross Profit                                        Gross Profit

2007                _________________             2007   __________________

2008                                                    _____ 2008   __________________

2009                _________________             2009___________________