Question 1 [40 marks! Tai Hing Construction Limited (\"Tai Hing\") specializes in the construction of sports ground and child playground for more than 10 years. Tai Hing is always considered to be one of the top three contractors on the HKSAR Government list. Although the industry has keen price competition, Tai Hing can still managed to make prots. The nancial year end of Tai Hing is 31 March. Recently, Tai Hing contracted to build a child playground located at Wanchai. The contract agreement lists out detailed specications to complete the constructions of playground equipment, soft play, safety surfacing and ground works, etc. in three years. The contract price has been agreed at $600,000. Costs and relevant data of the project are shown as below: M M M Construction costs incurred during the year $120,000 $147,800 $247,450 Estimated costs to complete the contract 380,000 247,200 - Partial billings during the year 80,000 250,000 270,000 Cash collection during the year 50,000 230,000 280,000 Required: [All gures MUST be rounded to an integer (e.g. 50% and $125,000) by taking full decimal places in the middle steps and round the nal answers into the whole dollar amount] a. Compute the percentage of completion, revenue recognized and estimated gross prot for the three years, assuming the company adopts percentage of completion method. b. Prepare all necessary journal entries to record (1) costs, (2) billings, (3) cash collections and (4) prot recognition to record the playgron construction for 2019 under the percentage-of-completion and the cost-recovery methods. c. Prepare an extract of the statement of nancial position as at 31 March 2020 by showing all relevant items under the percentage-of-completion and the cost-recovery methods. d. On 31 March 2020, Tai Hing revised the \"costs to complete\" as $327,200 due to some unexpected damages at the construction site. i. Compute the revised gross prot or loss for 2020 under the percentage-of-completion method. ii. Prepare any necessary journal entries under the cost-recove methods for this unexpected damages if the Chairman believes that it can be resolved eventually and the amount is likely to be reduced by one-third