1. AAA Company has a contract to build a building. The initial amount of revenue agreed in the contract is P9,000,000. The contractor's initial estimate of contract costs is P8,000,000. It will take 3 years to build the building. By the end of year 1, the contractor's estimate of contract costs has increased to P8,050,000. In year 2, the customer approves a variation resulting in an increase in the contract revenue of P200,000 and estimated additional contract costs of P150,00. At the end of year 2, cost incurred include P100,000 for standard materials stored at the site to be used in year 3 to complete the project. The contractor determines the percentage of completion by calculating the proportion that contract costs incurred for work performed to date to the estimated total contract costs. A summary of financial data during the construction period is as follows: Year 1 Year 2 Year 3 Contract costs incurred 2,093,000 4,075,000 2,032,000 Estimated costs to complete 5,957,000 2,032,000 0 Billings to client 2,700,000 4,500,000 2,000,000 Collections 2,500,000 4,000,000 2,700,000 Determine the following: a. Percentage of completion for year 1 and year 2 b. Amount of contract revenue, contract costs and profit to appear in the income statement of each year C. Entries required to record the transactions each year