Undersea Construction Ltd Commenced the Construction of a Tunnel Under

Multiple Choice

Undersea Construction Ltd commenced the construction of a tunnel under a major river for public transport on 1 July 2014.It has a fixed-price contract for total revenues of $36 million.The expected completion date is 30 June 2017.The expected total cost to Undersea Construction at the beginning of the project is $28 million.The following information relates only to the construction of the tunnel: $$\begin{array} { | l | r | r | r | } \hline \text { For the year ending } 30 \text { June } & \begin{array} { r } 2015 \\( \$ 000 ) \end{array} & \begin{array} { r } 2016 \\( \$ 000 ) \end{array} & \begin{array} { r } 2017 \\( \$ 000 ) \end{array} \\\hline \text { Costs for the year } & 5000 & 15000 & 10000 \\\hline \text { Costs incurred to date } & 5000 & 20000 & 30000 \\\hline \text { Estimated costs to complete } & 22000 & 8500 & - \\\hline \text { Progress billings during the year } & 10000 & 22000 & 4000 \\\hline \text { Cash collected during the year } & 9000 & 19000 & 8000 \\\hline\end{array}$$ Undersea 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)
$$\begin{array} { | l | l | l | } \hline 2014 ( \$ 000 ) : & 2015 ( \$ 000 ) : & 2016 ( \$ 000 ) : \\\hline 4000 & 4000 & ( 3000 ) \\\hline\end{array}$$
B)
$$\begin{array} { | l | l | l | } \hline 2014 ( \$ 000 ) : & 2015 ( \$ 000 ) : & 2016 ( \$ 000 ) : \\\hline 10000 & 22000 & 4000 \\\hline\end{array}$$
C)
$$\begin{array} { | l | l | l |} \hline 2014 ( \$ 000 ) : & 2015 ( \$ 000 ) : & 2016 ( \$ 000 ) : \\\hline 1667 & 3596 & 737 \\\hline\end{array}$$
D)
$$\begin{array} { | l | l | l | } \hline 2014 ( \$ 000 ) : & 2015 ( \$ 000 ) : & 2016 ( \$ 000 ) : \\\hline 925 & 3989 & 1086 \\\hline\end{array}$$