Luxury Living Concepts Corp. (LLC) is a publicly accountable enterprise that builds large complexes, including schools, office towers, apartment buildings and shopping centres, on a contract basis. Additional information with respect to the company is as follows:

LLCs year end is December 31.

The company uses the cost-to-cost approach to determine the stage of completion of its construction projects.

The enterprise rounds the percentage of completion to two decimal places (for example, 13.54%).

A discount rate of 4% adequately reflects the underlying credit risk of LLCs customer for this transaction.

In 20X1, LLC entered into a $120 million contract to construct a shopping mall over a three-year period. Construction of the project was completed in late 20X3. Total costs were originally estimated to be $98 million. LLCs progress on the contract and other pertinent information is detailed below:

(in $000s) 20X1 20X2* 20X3** Total

Costs incurred during year 23,000 55,000 43,000 121,000

Cumulative costs incurred to date 23,000 78,000 121,000 Estimated costs to complete 72,000 46,000 Progress billings during the year 29,000 51,000 40,000 120,000 Collections during the year 22,000 50,000 48,000 120,000

* The revised cost data was not known in 20X1.

** The revised cost data was not known in 20X2.

Required:

a) Prepare the required journal entries to record transactions relating to the contracts for the 20X1, 20X2 and 20X3 fiscal periods. Show all supporting calculations for each journal entry. The calculations are to be referenced or included in the description of the journal entry.

b) Prepare the excerpts of LLCs statements of financial position as at December 31, 20X1, and December 31, 20X2 (exclude the impact on cash and retained earnings).