B. L&P was contracted to construct a building for Rosco at the beginning of 2020. L&P uses the percentage-of-completion method of revenue recognition since, given the characteristics of its business and contracts, it is the most appropriate method. Progress toward completion is measured on a cost-to-cost basis. At the end of the year, December 31, 2020, the following was the status of that construction contract for L&P Corp: Billings to date Costs incurred to date: Labour Materials and subcontractor Indirect costs Latest forecast total cost Contract Price $4,500,000 $ 928,000 1,296,000 386,000 $6,000,000 $8,000,000 A It should be noted that included in the above costs incurred to date were standard electrical and mechanical materials stored on the job site, but not yet installed, costing $210,000. These costs should not be considered in the costs incurred to date. Required i. Compute the percentage of completion on the contract at the end of 2020. Costs Incurred to Date Total Estimated Costs $ Percentage of Completion % (3 marks) ii. Indicate the amount of gross profit that would be reported on this contract at the end of 2020. Revenue Costs incurred Gross profit (3 marks) iii. Prepare the journal entry to record the income (loss) for 2020 on L&P books. Dr. Construction Expenses Dr. Construction in Process - Gross Profit Cr. Construction in Process - Gross Loss Cr. Revenue from Long-Term Contracts (4 marks) 11