QUESTION1 (20 MARKS) Portmore Development Limited currently has two construction contracts. The contracts involve the construction of a Health Clinic at Cumberland, and a new hotel in Hellshire. Management is unaware with regard to when revenue, costs and profits from the contracts are to be recognized. However, based on the construction industry as well as entity's accounting policies, the outcome of a contract cannot be estimated reliably until a contract is at least 20% complete. Below are information relating to both contracts for the year ended December 31, 2019 Health Clinic Contract Price $60,000,000 Work Certified to date $18,000,000 Cost Incurred to date $20,000,000 Estimated cost to complete $15,000,000 Progress Billing $12,000,000 Cash received $7,000,000 Hotel $200,000,000 $30,000,000 $10,000,000 $150,000,000 $10,000,000 $11,000,000 The company uses the input method to determine the projects' level of completion. The company recognised revenues and cost on the health clinic amounting to $5,000,000 and $4,000,000 for the year ended December 31, 2018. Management indicates that contract costs incurred are probable of being recovered. A fault was discovered in the construction of the foundation of the hotel, which will require rectification at a cost of $10,000,000, this has already been included in the cost to completion of the project. The lawyers believe the fault in the design rest with the customer and are reasonably certain that the customer will agree to pay the additional $10,000,000 Required: a) Prepare an extract of the statement of profits or loss to recognize contract revenue, cost and profits for the year ended December 31, 2019 (11 marks) b) Prepare an extract of the statement of financial position as at December 31, 2019 (9 marks)