Question 2 - Amelio Corp. Amelio Corp. builds long & sturdy suspension bridges. This is an extremely risky line of business. Amelio Corp. typically works on lengthy projects which span multiple years, given the construction, testing and quality control involved in each project. Management of Amelio Corp. is extremely excited to have won a bid to build a suspension bridge in a core tourist area of Palimi City for a contract value of $12 million. The information below outlines the relevant cost, billings, and collection data for the three-year length of the project: 2020 2019 2018 All amounts in thousands of dollars Costs incurred during the year $3,000 $3,800 $1,000 Billings during the year 6,250 3,000 750 Estimated costs to complete 0 2,700 7,000 Collections during the year 6,500 2,700 675 Required: 1. Under the Completed Contract Approach (ASPE), for each of the three years: (a) Prepare all journal entries related to the long-term construction contract of the suspension bridge. (b) Prepare partial balance sheets and income statements at December 31. 2. Under the Percentage of Completion Approach (IFRS/ASPE), for each of the three years: (a) Prepare all journal entries related to the long-term construction contract of the suspension bridge. (b) Prepare partial balance sheets and income statements at December 31. HINT: set up t-accounts for each relevant account to help you track balances Question 2 - Amelio Corp. Amelio Corp. builds long & sturdy suspension bridges. This is an extremely risky line of business. Amelio Corp. typically works on lengthy projects which span multiple years, given the construction, testing and quality control involved in each project. Management of Amelio Corp. is extremely excited to have won a bid to build a suspension bridge in a core tourist area of Palimi City for a contract value of $12 million. The information below outlines the relevant cost, billings, and collection data for the three-year length of the project: 2020 2019 2018 All amounts in thousands of dollars Costs incurred during the year $3,000 $3,800 $1,000 Billings during the year 6,250 3,000 750 Estimated costs to complete 0 2,700 7,000 Collections during the year 6,500 2,700 675 Required: 1. Under the Completed Contract Approach (ASPE), for each of the three years: (a) Prepare all journal entries related to the long-term construction contract of the suspension bridge. (b) Prepare partial balance sheets and income statements at December 31. 2. Under the Percentage of Completion Approach (IFRS/ASPE), for each of the three years: (a) Prepare all journal entries related to the long-term construction contract of the suspension bridge. (b) Prepare partial balance sheets and income statements at December 31. HINT: set up t-accounts for each relevant account to help you track balances
