E184(Recognition of Profit on Long-Term Contracts) During 2010 Nilsen 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 2012Costs incurred to date$400,000$825,000$1,070,000Estimated costs to complete600,000275,000-0-Billings to date300,000900,0001,600,000Collections to date270,000810,0001,425,000InstructionsCompute the amount of gross profit to be recognized each year assuming the percentage-of-completion method is used.Prepare all necessary journal entries for 2011.Compute the amount of gross profit to be recognized each year assuming the completed-contract method is used.
