Hillier Construction Ltd Commenced the Construction of a Building on 1

Multiple Choice

Hillier Construction Ltd commenced the construction of a building on 1 July 2013.It has a fixed-price contract for total revenues of $45 million.The expected completion date is 30 June 2016.The expected total cost to Hillier Construction at the beginning of the project is $35 million.The following information relates only to the construction of this building: $$\begin{array} { | l | r | r | r | } \hline \text { For the year ending } 30 \text { June } & \begin{array} { r } 2014 \\( \$ 000 ) \end{array} & \begin{array} { r } 2015 \\( \$ 000 ) \end{array} & \begin{array} { r } 2016 \\( \$ 000 ) \end{array} \\\hline \text { Costs for the year } & 12500 & 15000 & 10000 \\\hline \text { Costs incurred to date } & 12500 & 27500 & 37500 \\\hline \text { Estimated costs to complete } & 23000 & 8500 & - \\\hline \text { Progress billings during the year } & 10000 & 12000 & 23000 \\\hline \text { Cash collected during the year } & 10000 & 11000 & 24000 \\\hline\end{array}$$ Hillier Construction uses the percentage-of-completion method based on cost to account for its construction contracts.What is the gross profit to be recognised in each of the 3 years (rounded to the nearest $000) ?

A) $\begin{array}{|l|l|l|}\hline 2014(\$ 000) & 2015(\$ 000) & 2016(\$ 000) \\\hline 3345 & 3530 & 3970 \\\hline\end{array}$
B) $\begin{array}{|l|l|l|}\hline 2014(\$ 000) & 2015(\$ 000) & 2016(\$ 000) \\\hline 3345 & 3530 & 625 \\\hline\end{array}$
C) $\begin{array}{|l|l|l|}\hline 2014(\$ 000) & 2015(\$ 000) & 2016(\$ 000) \\\hline 7747 & 20135 & 17118 \\\hline\end{array}$
D) $\begin{array}{|l|l|l|}\hline 2014(\$ 000) & 2015(\$ 000) & 2016(\$ 000) : \\\hline 3571 & 4286 & 2857 \\\hline\end{array}$