Answer:
net loss during 2019 = $107,000
Explanation:
Cost incurred Estimated Cost to Complete
2017 $252,000 $1,560,000
2018 $1,610,000 $510,000
2019 $460,000 $0
The completed contract method for recognizing revenue and expenses is fairly simple, all revenues and expenses are recognized once the contract is completed.
Under this method, all the expenses should be recognized during 2019 = $252,000 + $1,610,000 + $460,000 = $2,322,000, and revenue is also recognized during 2019 = $2,215,000
total revenue $2,215,000
- total expenses ($2,322,000)
net loss ($107,000)
*The IRS doesn't allow completed contract method for projects that last more than 2 years.
