1. Entity A is a local contractor listed in Hong Kong for many years. It entered into a contract with the government on 1 January 2021 to build a cross-harbour tunnel.

   The total contract revenue was $5,600,000. On 31 December 2021, the contract was certified as 35% complete. Costs incurred during the year were $1,480,000 and costs to complete are estimated at $2,800,000. The amount of $1,400,000 has been billed to the government but not yet paid.

   REQUIRED:

   Evaluate the amount of Contract Asset or Contract Liability that will be recognised in the Statement of Financial Position on 31 December 2021.

   	1.	None of them.
   	2.	$1,018,000 Contract Asset
   	3.	$542,000 Contract Asset
   	4.	$542,000 Contract Liability
   	5.	$1,018,000 Contract Liability