There was new Revenue Recognition guidance issued during the summer of 2014.This guidance just became effective for public companies for annual reporting periods beginning after December 15, 2018.The guidance contained in the Codification Topic 605 reflects the old guidance, not the revised guidance (the revised guidance can be found in Topic 606).At some point they will edit the Codification to reflect that the guidance is no longer pending and has been transitioned.However, for now, it still shows both sets of guidance in the Codification and shows the new guidance as pending.That's great - it gives us a chance to practice identifying, from looking at the Codification, when pending guidance exists that has been issued but is not yet effective!You will need to use Topic 605 (the old guidance) when answering the following questions.1. The old guidance in Topic 605 indicates that there are limited circumstances in which revenue may be recognized using the installment or cost-recovery methods.Give one example of when these methods may be used (and the Codification reference supporting your example).2. Under the new guidance, the installment method will no longer be used.Look at the guidance reference that you identified in your answer to Question 1.By looking at this guidance in the Codification, how can you tell that there will be changes to this guidance in the future?(How is this indicated in the Codification?) 3. Rochester Company was contracted to build a new warehouse for Focus International over the next 3 years.Rochester uses the percentage-of-completion method to recognize revenue.Rochester began work on the contract in 2016 and was on budget at the end of the year.As such, in accordance with its accounting policies, it recognized an estimated amount of profit on its 2016 Income Statement.Beginning in 2017, Rochester began to encounter some unexpected expenses.A wildfire spread throughout the western part of the U.S., destroying a large amount of forest and driving up lumber prices.Additionally, Rochester encountered a number of delays that put construction significantly behind schedule.By the end of 2017, Rochester estimates that its costs will exceed revenues for this contract, resulting in a loss.Under the old guidelines, what guidance was provided in the Codification in Topic 605 (include the appropriate reference with your answer) to assist Rochester in determining the timing and amount of when to recognize this loss?4. Looking at the guidance reference that you cited in Question 3, will the answer change as the new guidance becomes effective in 2019 or will the timing and amount of the loss recognition remain the same?