Question $1(20$ marks$)$

Sunshine Construction Company Limited engaged in a construction project. The project was

begun in $2022$ and completed in $2025$ with contract price of $$2,000,000.$ Cost and other data

relating to the project was presented below:

Assume that the Company uses the PERCENTAGE$-$OF$-$COMPLETION METHOD for

revenue recognition. The Company's financial year$-$end is $31$ December.

Required: $($Answers should be rounded to two decimal places if necessary$)$

$($a$)$ Calculate the gross profits $($losses$)$ recognized for the financial years $2022,2023,2024$ and

$2025,$ respectively. $($Show your workings clearly$)$

$(4$ marks$)$

$($b$)$ Prepare the journal entries necessary to record the above information on the Company's

books during $2024.$

$(9$ marks$)$

$($c$)$ Prepare an extracted Statement of Financial Position for $2024$ showing items related to

this long$-$term construction project.

$(3$ marks$)$

$($d$)$ Compute the gross profits $($losses$)$ recognized for the financial years $2022,2023,2024$ and

$2025,$ assuming the company uses the COST RECOVERY METHOD to account for the

long$-$term contract.

$(4$ marks$)$