Question 2: Tricky Ricky Construction Company, Inc., entered a fixed-price contract with Gracelyn Associates on July 1, 2021, to construct a four-story office building. At that time, Tricky Ricky estimated that it would take between two and three years to complete the project. The total contract price for construction of the building is $5.500,000. The building was completed on December 31, 2023. Estimated percentage of completion, accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings to Gracelyn under the contract were as follows: 12/31/21 12/31/22 12/31/23 10% 80% 100% $350,000 $4,500,000 $5,750.000 20 2 SO 1.500,000 2.500.000 1.500.000 *Hint: Even though the estimated costs to complete has not been provided you can calculate this number because you have been given the complete and can therefore calculate the total estimated costs. % Complete Costs incurred to date Est. Costs to complete Billings to Gracelyn, to date Required: 1. Compute gross profit or loss to be recognized as a result of this contract for each of the three years. Tricky Ricky concludes that the contract does not qualify for revenue recognition over time. 2. Assuming Tricky Ricky recognizes revenue over time according to percentage of completion, compute gross profit or loss to be recognized in each of the three years. 3. Assuming Tricky Ricky recognizes revenue over time according to percentage of completion, compute the amount to be shown in the balance sheet at the end of 2021 and 2022 as either cost in excess of billings or billings in excess of costs