Question 1 (30 marks) As at 1 January 2017, Nelson Company started a long-term contract to construct a building infrastructure with a contract price of $1,600,000. The construction project will be completed on 31 December 2019. Costs and other relevant data for the three years are shown as below: Costs incurred during the year Estimated costs to complete the project Customer billings to date (cumulative) Cash collections to date (cumulative) 2017 $400,000 600,000 300,000 270,000 2018 $425,000 275,000 900,000 810,000 2019 $245,000 -0. 1,600,000 1,425,000 Assume that the Company uses the PERCENTAGE-OF-COMPLETION METHOD for revenue recognition. The Company's financial year-end is 31 December Question 1 (Cont.) Required: 2 Compute the amount of gross profit or loss to be recognized in 2017, 2018 and 2019, [Note: taking full decimal places in the middle steps and round the final answers of gross profits/(losses) into the whole dollar amount.] Prepare all necessary journal entries to record (1) costs, (2) billings, (3) cash collections and (4) profit recognition of the relevant contract for 2018. Prepare the extracted Statement of Financial Position as at 31 December 2018 showing items related to this construction project. Compute the amount of gross profits/(losses) to be recognized in 2017, 2018 and 2019 assuming the company uses the COST RECOVERY METHOD to account for the long-term contract 5