Johnson Construction Inc. had the following data relating to one of its long-term construction contracts. The contract called for the delivery of a large office building to its client for a fixed price of $80 million.

Data pertaining to the contract are found below:
	Year 1	Year 2	Year 3
Costs Incurred by Year:	$ 36,000,000	$ 20,000,000	$ 19,000,000
Expected Completion Costs:	$ 24,000,000	$ 28,848,485	$ -
Costs Incurred to Date:	$ 36,000,000	$ 56,000,000	$ 75,000,000
Billings to Date:	$ 40,000,000	$ 60,000,000	$ 80,000,000
Cash Collections by Year:	$ 30,000,000	$ 25,000,000	$ 25,000,000

Required:

1. Provide all journal entries with respect to this contract for Years 1, 2 & 3 using the percentage of completion method. (14.5 marks)
2. Show how the effects of this contract would be presented on Johnsons Year 2 Balance Sheet as at the end of Year 2, using the percentage of completion method. (3 marks)
3. Assume that Johnson Inc. follows ASPE and that there is significant uncertainty with respect to this contract. How much profit or loss would Johnson need to recognize in Year2? Journal entries are not required. (2 marks)