PG981 P18- 15 (Completed- Contract Method) Monat Construction Company, Inc., entered into a firm fixed-price contract with Hyatt Clinic on July 1, 2010, to construct a four- story office building. At that time, Monat estimated that it would take between 2 and 3 years to complete the project. The total contract price for construction of the building is $ 4,400,000. Monat appropriately accounts for this contract under the completed- contract method in its financial statements and for income tax reporting. The building was deemed substantially completed on December 31, 2012. Estimated percentage of completion, accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings to the Hyatt Clinic under the contract are shown below. At At At December December December 31, 2010 31, 2011 31, 2012 Percentage of completion 30% 70% 100% Contract costs incurred $ 1,140,000 $ 3,290,000 $ 4,800,000 Estimated costs to complete the contract $ 2,660,000 $ 1,410,000 – 0– Billings to Hyatt Clinic $ 1,400,000 $ 2,500,000 $ 4,300,000 Instructions ( a) Prepare schedules to compute the amount to be shown as “ Cost of uncompleted contract in excess of related billings” or “ Billings on uncompleted contract in excess of related costs” at December 31, 2010, 2011, and 2012. Ignore income taxes. Show supporting computations in good form. ( b) Prepare schedules to compute the profit or loss to be recognized as a result of this contract for the years ended December 31, 2010, 2011, and 2012. Ignore income taxes. Show supporting computations in good form.