1. Determine the amounts of revenue, cost of sales, and gross profit that Amsterdam LLC recognizes in each year. Assume the firm uses the percentage-of-completion method and measures progress based on costs incurred.
2. Assume that the firm had estimated at the end of 2018 that 21,000 hours (instead of 18,000 hours) will be needed to complete the project. All other incurred and estimated hours remain the same as above. Explain how this change in estimate would affect (i) profit in 2018, and (ii) the total (aggregate) profit the firm recognizes over the contract period.
3. Calculate the Net Project Account balance at the end of each year.
