257 219 250 251 Question 7 (15 marks) 252 Mariners Company has a non-cancellable contract to construct a bridge for revenue of S 3,950,000. The contract is to 254 start in July 2020, and the bridge is to be completed in September 2022. The following data pertain to the 255 construction period 256 2020 2021 2022 Costs incurred during the year $250,000 $1,500,000 $620,000 258 Estimated costs to complete $2,050,000 S600,000 259 Instructions Part 1 - Mariners Company uses the percentage of completion method, calculate the gross profit for this contract for 262 the years 2020 2021 and 2022. Show supporting calculations. (12 marks) 263 264 Part 2 - You are hired as the new Accounting Manager of Mariners. On your first day reporting to work, you are 265 told by the CFO, Mariners is considering accounting for some short-term construction contracts using the 266 completed-contract method. Provide the advantages and disadvantages of this method. (3 marks) 267 268 Q7 Answer 260 261