In January 2024, the Province of Ontario awarded Cot Contracting Ltd. (CCL) a $52.5 million contract to

In January 2024, the Province of Ontario awarded Coté Contracting Ltd. (“CCL”) a $52.5 million contract to construct a new seniors’ care facility adjacent to the Humber River Hospital in Toronto, Ontario. CCL estimated that it would take three years to take the project from planning through to completion. The company has a December 31 year end and uses the percentage-of-completion method, with completion measured as the ratio of costs incurred to date to the total estimated construction costs. CCL reports using IFRS and had the following information available in relation to this construction contract:

Required 

a. Determine the percentage of completion, revenue, and gross profit to be recognized for each year of the contract. 

b. Prepare all necessary journal entries for each year of the contract.

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Costs incurred during the year Total costs incurred to date Estimated costs to complete Estimated total project cost Progress billings during the year Cash collected during the year 2024 $10,736,000 10,736,000 38,064,000 48,800,000 10,000,000 8,200,000 2025 $16,816,000 27,552,000 21,648,000 49,200,000 22,000,000 20,700,000 2026 $22,048,000 49,600,000 49,600,000 20,500,000 23,600,000