Question 6. In 20X5, Build-It Corp. (BIC) was awarded a fixed-price contract of $9,400,000 to construct a warehouse for a client. Work began in 20X5 and was completed in 20X7. BIC originally estimated the project costs at $8,500,000. A schedule of actual costs and revised estimates, together with progress billings and collections, follows:

(in $'000s) 20X5 20X6 20X7

Cumulative costs incurred 1,900 6,400 8,800

Estimated costs to complete 6,800 2,800 0

Progress billing during the year 2,200 6,800 400

Collections during the year 1,500 7,000 900

* This revised cost data was not known in 20X5.

** This revised cost data was not known in 20X6.

BIC reports its financial results in accordance with IFRS. Its year end is December 31. It uses the cost-to-cost method to determine construction revenue. Project completion is considered a single performance obligation that will be satisfied over time

Required: Prepare all required summary journal entries complete with explanations for each of the 20X5, 20X6, and 20X7 fiscal years. (Round the percentage of completion to one significant decimal place for example, 16.4% to determine the amount of revenue to be recognized in each year.)