Question 4 Blossom Enterprises Ltd. has entered into a contract beginning in February 2020 to build two warehouses for Atlantis Structures Ltd. The contract is a non-cancellable fixed price contract for $10.1 million. The following data pertain to the construction period (all figures in thousands). 2020 2021 2022 Costs for the year $3,815 4,645 1,180 Estimated costs to complete 1,250 Progress billings for the year (non-refundable) 3,400 4,150 2,550 Cash collected for the year 3,200 4,200 2,700 4,645 The construction industry has experienced significant expansion, making construction materials and labour more costly than originally estimated. Blossom finds it extremely difficult to estimate the costs to complete construction and therefore difficult to estimate the percent complete. It must account for the construction project using the zero-profit method. Calculate the amount of the gross profit to be recognized each year of the contract. (Do not leave any answer field blank. Enter o for amounts. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) 2020 2021 2022 Gross profit / (loss) Prepare the journal entries for 2020 and 2021. (Use Materials, Cash, Payables for costs incurred to date.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.) For Year 2020: Account Titles and Explanation Debit Credit (To record cost of construction) (To record progress billings) (To record collections) (To record revenues) (To record construction expenses) For Year 2021: Account Titles and Explanation Debit Credit (To record cost construction) (To record progress billings) (To record collections) (To record revenues) (To record construction expenses) What is the balance in the Contract Asset/Liability account at December 31, 2020 and 2021? December 31, 2020 December 31, 2021 Balance in the Contract Asset/Liability account Show how the construction contract would be reported on the SFP and the income statement for the year ended December 31, 2021. (List Current assets in order of liquidity. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45). Do not leave any answer field blank. Enter o for amounts.) BLOSSOM ENTERPRISES LTD. Partial Statement of Financial Position BLOSSOM ENTERPRISES LTD. Partial Income Statement