Ipswich Construction Company is a private company that follows ASPE.The company has a December 31 year-end.Ipswich commenced business operations on January 1, 2020. The company's board of directors is currently meeting to choose between use of the completed-contract method and use of the percentage-of-completion method for reporting long-term construction contracts in its financial statements. You have been engaged to assist the company's controller at the board meeting and have been provided with the following information:

construction activities for the year ended december 31, 2020

Total ContractBillings ThroughCash Collections

ProjectPrice12/31/20 Through 12/31/20

A$615,000$340,000$310,000

B450,000135,000135,000

C475,000475,000390,000

D600,000240,000160,000

E480,000400,000400,000

$2,620,000$1,590,000$1,395,000

Contract CostsEstimated

Incurred ThroughAdditional Costs to

Project12/31/20Complete Contract

A$510,000$120,000

B130,000260,000

C350,000-0-

D370,000290,000

E320,00080,000

$1,680,000$750,000

Each contract is with a different customer and any work remaining to be done on contracts is expected to be completed in 2021.

Required:

(a)Assume Ipswich Construction Company follows the completed contract method. Calculate the amount of gross profit/(loss) to be recorded for each project for 2020. If no gross profit/(loss) is to be recorded for a given project, enter a zero. Enter your answers in the table provided. (5 marks)

(b)Assume Ipswich Construction Company follows the percentage of completion method. Calculate the amount of gross profit/(loss) to be recorded for each project for 2020. If no gross profit/(loss) is to be recorded for a given project, enter a zero. Enter your answers in the table provided. (7 marks)

(c)Prepare the general journal entry to record revenue and gross profit on Project B for 2020, assuming that the company decides to follow the percentage-of-completion method. (3 marks)

Note:Supporting calculations must be shown.