Alpha Construction Company commenced operations January 1, 2014 The Directors are meeting to select the most suitable method for the year end accounting of their long term construction contracts Each project is an independent You have been engaged to assist Alpha's financial controller in the preparation of a presentation to be given at the board meeting. The controller provides you with the following construction activity for the year ending 2014 Total contract pre Project Banting through Dec. 31 $340,000 210,000 475.000 $1.025.000 $513.000 600.000 45.000 $10.000 Cash collections through Dec. 31 $310.000 210,000 390.000 $910.000 Contract costs incurred through Dec. 31 $424.000 195.000 350.000 5969.000 Estimated additional costs to complete contract $101.000 455.000 S$56,000 Page 5 Required a) For each project, calculate the amount of gross profit to be recorded for the year ended December 31, 2014, if the percentage-of-completion method is used. (6 marks) b) For each project, calculate the amount of gross profit to be recorded for the year ended December 31, 2014 if the cost recovery method is used. 3 marks) Indicate the total balances that would appear in the statement of financial position at December 31, 2014 for the following accounts listed below, assuming that the percentage- of-completion method is used. Accounts Receivable (2 marks) Construction in Process (3 marks) How would the balances in the accounts discussed in part (c) change (if at all) if the cost- recovery method is used? (1 mark)