On 1st January 20×1, Constructor Limited (C Ltd) Entered into a Contract: Accounting Assignment, SMU, Singapore

Assignment Details:

On 1st January 20×1, Constructor Limited (C Ltd) entered into a contract to build a factory for $12 million. The company adopts the latest Financial Reporting Standards and recognizes the percentage of completion based on cost inputs. Invoicing was agreed at 20% on January 1st 20×1 at the start of the project, and subsequently, in December each year as follows: 20% on December 31st 20×1, 30% on December 31st 20×2, 25% on December 31st 20×3.

The balance 5% is invoiced six (6) months after the completion of and handover of the project. Collections for the invoices are received one month after the invoice is sent. In 20×1, the actual costs incurred amounted to $4 million and additional costs to complete the project are expected to be $8.5 million.

In 20×2, the actual costs incurred were $4 million and the expected additional costs to complete the project in 20×3 are expected to be $4.2 million. The project was completed in December 20×3. Costs incurred in the year amounted to $3.8 million and no further costs are expected.

Question: C Ltd. has a 31st December year-end. Apply FRS115 Revenues from contracts with customers, prepare the necessary journal entries required by C Ltd. to record the transactions for the years 20×1, 20×2, and 20×3. Journal entry narrations are not required. Provide your answers to the nearest dollar.