a) The project was started during 2016 and was completed in 2018. Information relating to the problem 3: Magnum Construction contracted to construct a factory building for $885,000. contract is as follows: Costs incurred during the year Billings during the year Cash collections during the year 2018 $245,000 100,000 305,000 200,000 2016 $350,000 380,000 2017 360,000 325,000 200,000 Required: a. Determine the amount of revenue, construction expense and gross profit to be recognized each year in 2016, 2017, and 2018. Show calculations. Completed contract method 2016 2017 2018 Revenue Construction expense Gross profit Percentage of completion method 2016 2017 2018 Revenue Construction expense Gross profit b. Briefly explain why some companies use the Percentage-of-completion method? 126