Kee huat steel constructor maanged to secure a fixed price contract from Resort sentosa to buid a roller-coaster ride for its theme park.The project would last three years and the inital amount of revenue agreed in the contract was $12million was $12 million.The inital expected cost of the contract was $9 million.The construction agreement also gives resort sentosa th option to request kee huat to build another simiklar ride at the same theme park at the same construction price as per the tender. When construction began,there was an unforeseen rise in the price of steel and the estimate of contract costs increased to $10 million.In the second year,kee huat negotiated with resort sentosa and a variation of 1 million increase in the contract revenue was agreed upon.Kee huat uses the percentage of completion method for its construction contracts. The following dat relates to the project: -------------------------------------------------------------------------------------------------------- Year 1 Year 2 Year 3 ($'000) ($'000) ($'000) -------------------------------------------------------------------------------------------------------- Intital revenue 12,000 12,000 12,000 variation - 1,000 1,000 Total contract revenue 12,000 13,000 13,000 costs for the year 3,500 4,000 2,500 costs incurred to date 3,500 7,500 10,000 estimated costs to complete 6,500 2,500 - progress billings during the year 4,000 5,000 4,000 cash collected during the year 3,500 5,000 4,500 --------------------------------------------------------------------------------------------------------- Requried; (a) Compute the gross profit to be recognized for each of the three years. (b) If the outcome of the constrution cannot be reliably estimated,what would the gross the gross profit for each year be?Give reasons for your answer. (c0 Assuming that soon after kee huat has commenced the construction work,resort sentosa exercises the option,within the agreed time perod limit,requesting kee huat to build the additonal roller-coaster ride at the same construction price as per the tender.Determine whether kee huat should treat the construction of the first roller-coaster ride and the additional roller-coaster ride as separate condstruction or a single construction contract