Universal Construction Ltd uses the percentage-of-completion method to account for its construction contracts. On 1 January 20x3, Universal Construction Ltd was contracted to construct a staff canteen at the General Hospital. It was estimated that the whole project would take three years to complete. The total contract price was fixed at $6,500,000. The estimated costs to fulfil the contract at the start of the construction was $5,000,000. However, at the end of 20x4, the total cost had increased to $5,700,000 and that the actual cost at the end of 20x5 amounted to $6,000,000 Details relating to the project are as follows: 20x3 S-000 20x4 S 000 20x5 $ 000 Cost incurred to date 1,000 1,995 6,000 Progress billing to date 2,000 5,350 6,500 Cash collected to date 1,550 4,050 5,050 The above costings relates to fulfilling the contract and should be capitalised. The company's year end is 31 December. Required: (a) (b) Calculate the construction revenue, construction costs and the profit recognised at 31 December 20x3 20x4 and 20x5. Journal entries to effect the transactions for the years ended 31 December 20x3,20x4 and 20x5. Prepare a partial Profit and Loss Account and Balance Sheet to indicate how the information would be reported in the financial statements for 20x4. (c) Universal Construction Ltd uses the percentage-of-completion method to account for its construction contracts. On 1 January 20x3, Universal Construction Ltd was contracted to construct a staff canteen at the General Hospital. It was estimated that the whole project would take three years to complete. The total contract price was fixed at $6,500,000. The estimated costs to fulfil the contract at the start of the construction was $5,000,000. However, at the end of 20x4, the total cost had increased to $5,700,000 and that the actual cost at the end of 20x5 amounted to $6,000,000 Details relating to the project are as follows: 20x3 S-000 20x4 S 000 20x5 $ 000 Cost incurred to date 1,000 1,995 6,000 Progress billing to date 2,000 5,350 6,500 Cash collected to date 1,550 4,050 5,050 The above costings relates to fulfilling the contract and should be capitalised. The company's year end is 31 December. Required: (a) (b) Calculate the construction revenue, construction costs and the profit recognised at 31 December 20x3 20x4 and 20x5. Journal entries to effect the transactions for the years ended 31 December 20x3,20x4 and 20x5. Prepare a partial Profit and Loss Account and Balance Sheet to indicate how the information would be reported in the financial statements for 20x4. (c)