On 1 January 2014, Romulus Ltd signed a contract worth $21 000 000 to construct a light rail from Here to There. The light rail was to be built over three years, with progress payments of $7 000 000 to be made at the end of each year. Estimated costs were $15 000000 and the following costs incurred and paid by Romulus Ltd were in accordance with estimates and represented the percentage completed in each year:

$8 000 000

$5 000 000

$2000000

The project was completed in December 2016.

1 Using the percentage of completion method, what profit would Romulus Ltd report in 2014?

2 Using the percentage of completion method, what profit would Romulus Ltd report in 2015?

3 Using the percentage of completion method, what profit would Romulus Ltd report in 2016?

4 Using the completion of production method, what profit would Romulus Ltd report in 2016?