*E6.39 (LO 13) (Recognition of Profit on Long-Term Contract) Assume the facts given in E38, except now assume that the construction industry has experienced significant expansion, making construction materials and labour more costly than originally estimated. Vaughn finds it extremely difficult to estimate the costs to complete construction and therefore difficult to estimate the percentage complete. It must account for the construction project using the zero-profit method. Instructions a. Calculate the amount of the gross profit to be recognized each year of the contract. b. Prepare the journal entries for 2023 and 2024 . c. What is the balance in the Contract Asset/Liability account at December 31, 2023 and 2024? d. Show how the construction contract would be reported on the SFP and the income statement for the year ended December 31,2024 . *E6.39 (LO 13) (Recognition of Profit on Long-Term Contract) Assume the facts given in E38, except now assume that the construction industry has experienced significant expansion, making construction materials and labour more costly than originally estimated. Vaughn finds it extremely difficult to estimate the costs to complete construction and therefore difficult to estimate the percentage complete. It must account for the construction project using the zero-profit method. Instructions a. Calculate the amount of the gross profit to be recognized each year of the contract. b. Prepare the journal entries for 2023 and 2024 . c. What is the balance in the Contract Asset/Liability account at December 31, 2023 and 2024? d. Show how the construction contract would be reported on the SFP and the income statement for the year ended December 31,2024