A D E F H 4 5 After passing the accreditation for the practice of engineering, Razul Burahan, decided to practice his profession. On January 1, 2019, he created a business named "RB Engineering and Consultancy. The business has a year-end of December 31. 6 7 8 During 2019, the following transactions were occurred. 9 10 a) On January 1, Razul invested $60,000 cash and equipment valued at $110,000 into the business. 12 13 14 15 16 17 b) On January 1, RB Engineering and Consultancy signs a contract to build a hotel. The construction is scheduled to begin on January 5, 2019 and is estimated to take four years to complete. The business expects that its total cost for this project would be $135 million and charges its client $170 million in total. Received $23 million cash advance from client upon signing the contract. 18 Based on the given actual costs incurred, complete the following table showing the percentage of completion, revenue recognized 19 and gross profit for each year. Assume RB Engineering and Consultancy uses the percentage-of-completion method for revenue 20 recognition. 21 22 Year Costs Incurred Percentage of Completion Revenue Recognized* Gross Profit" 23 24 2019 $16 25 2020 $34 26 2021 $37 27 2022 $48 28 Total $135 29 The numbers are in million dollars. 30 31 32 c) On January 15, rendered consultancy service to Confex Co. amounting to $11,000 on account. On February 1, Confex Co. is 33 having cash flow problems and cannot pay the outstanding amounts on time. They agreed to covert the accounts receivable into a 34 one-year note. RB Engineering and Consultancy required annual interest of 11%, which will be collected when the note becomes due. 36 37 38 39 41 d) On March 1, RB Engineering and Consultancy borrowed cash from the bank and signed a $170,000, 1-year, 15% per annum note. Paid the note in full upon maturity. 42 e) On April 1, rendered consultancy service to Design Co... Design Co. has signed a one-month note for $20,000. The RB Engineering 43 and Consultancy requires annual interest of 13%, which will be collected when the note becomes due. On maturity date, April 30, 44 the note was dishonoured. Collected the total amount on July 1. 46 47 48 ) On June 30, RB Engineering and Consultancy purchased land - fair value at $1,300,000, a building-fair value at $1,200,000 and 49 parking lot fair value at $500,000. RB Engineering and Consultancy paid $2,200,000 cash for these three. 51 Sheet 1 +