JRE2 Inc. entered into a contract to install a pipeline for a fixed price of $2,410,000. JRE2 recognizes revenue upon contract completion. Cost incurred Estimated Cost to Complete 2020 $ 278,000 $ 1,690,000 2021 1,740,000 654,000 2022 590,000 0 In 2022, JRE2 would report gross profit (loss) of:

-$262,000

Explanation:

The calculation of gross profit or loss is shown below:-

Total revenue = $2,410,000

Total cost incurred = $278,000 + $1,740,000

= $2,018,000

Project total estimated cost = $2,018,000 + $654,000

= $2,672,000

Total income = Total revenue - Project total estimated cost

= $2,410,000 - $2,672,000

=-$262,000

Therefore for computing the gross loss we simply deduct the project total estimated cost from total revenue.