QUESTION 1 Grow Construction Limited currently has two construction contracts. The contracts involve the construction of a school hospital at Lucea, Hanover and a new hotel in Negril. The new school will cater for residents of Lucea, Haughton Court and Point. Meanwhile, the hotel is expected to facilitate business travellers into Hanover and Westmoreland Management is unaware with regard to when revenue, costs and prolits from the contracts are to be recognized. Nevertheless, based on the construction industry as well as entity's accounting policies, the outcome of a contract cannot be estimated reliably until a contract is at least 15% complete. Below are information relating to both contracts for the year ended December 31, 2020 Contract Price Cost Incurred to date Estimated cost to complete Progress Billing Cash received School $50,000,000 $10,000,000 $15,000,000 $12,000,000 $9,000,000 Hotel $200,000,000 $15,000,000 $135,000,000 $5,000,000 $4,000,000 The company uses the input method to determine the projects' level of completion. The company recognised revenues and cost on the school amounting to $3,000,000 and $2,500,000 for the year ended December 31, 2019. Management indicates that contract costs incurred are probable of being recovered Required: a) Prepare an extract of the statement of profits or loss to recognize contract revenue, cost and profits for the year ended December 31, 2020 (11 marks) b) Prepare an extract of the statement of financial position as at December 31, 2020 (9 marks)