Q-1. (Chapter-6): A6-19 Percentage of completion and Completed contract method: Star Construction Corporation has a contract to construct a building for $10,950,000. The building is controlled by the customer throughout the term of the contract. Total costs to complete the building were originally estimated at $8,850,000. Construction commenced on 4 February 205. Actual costs were in line with estimated costs for 205 and 206. In 207, actual costs exceeded estimated costs by $150,000. Total construction costs incurred in each year were as follows: 205:$2,700,000206:$4,500,00020X7:$1,800,000 Progress billings based on the amount of work completed were collected each year. Star Construction uses the percentage-of-completion method. The percentage-of-completion is based on costs incurred compared with estimated total costs of the project. Company also billed the client and collected the following payments Required: (12 Marks) Calculate Net income for the construction project for each of the three years: a) Completed contract method? 20X5: \$ 20x6: \$ 207. b) Percentage-of-completion method? (basis: estimated costs to complete) 20X5: \$ 20X6: ? 207