Question 1 AAA Ltd obtained a contract from the Telecoms Authority to build a cable for $100 million on 1 January 20x1. The initial estimate of the cost is $80 million. It will take approximately 3 years to build this cable. The contract costs incurred to date and the contract costs to complete the contract by the end of 20x1 are $32 million and $48 million respectively. AAA Ltd billed the Telecoms Authority a total of S42 million during the 20x1 and collected S38 million. Assume that AAA Ltd uses the costs to complete the contract to estimate the progress of completion. Further assume that AAA Ltd is a firnm incorporated in Singapore with December 31 year-ends and adopts the Singapore Financial Reporting Standards (FRSs). Required: Explain whether FRS 115 Revenue from Contracts with Customers can be applied to this contract. (a) (10 marks) Assume that FRS 115 is applicable to the contract, illustrate the accounting for this construction contract by preparing all necessary journal entries, narratives not required, for the financial year ending 20x1. Show all workings. (b) (10 marks) (c) Suggest and explain other methods to measure progress of completion