A6-19 IFRS percentage-of-completion method and completed-contract method: Star Construction Corp. has a contract to construct a building for $10,950,000. The building is controlled by the customer throughout the term of the contract. Total costs to complete the building were originally estimated at $8,850,000. Construction commenced on 4 February 20X5. Actual costs were in line with estimated costs for 20X5 and 20X6. In 20X7, actual costs exceeded estimated costs by $150,000.

Total construction costs incurred in each year were as follows:

20X5 $2,700,000

20X6 $4,500,000

20X7 $1,800,000

Billing each year were as follows:

20X5 $2,300,000

20X6. $4,900,000

20X7 $3,750,000

Required:

1. Calculated the revenues and gross profit for the construction project for each other the three years assuming the company uses inputs to measure progress.

2. Prepare the journal entries for revenue recognition for each year and for contract completion in 20X7

3. Prepare the journal entries for revenue recognition for each year and for contract completion in 20X7, if the customer did not take control of the asset until the building was fully constructed and title transferred.