ACME Is Investing in a New Heavy Oil Rig Operation

ACME is investing in a new heavy oil rig operation in northern Alberta. ACME has hired Max Contractors to construct the facilities. The contract price is $4,450 million to be completed over four years. The following information pertains to this construction contract.
$\begin{array} { | l | r | r | r | r | } \hline \text { (all amounts in \$millions) } & \text { Year 1 } & \text { Year 2 } & \text { Year 3 } & \text { Year 4 } \\\hline \text { Cumulative costs incurred to date } & 1,170 & 1,600 & 2,760 & 4,500 \\\hline \text { Estimated additional costs to complete } & 2,730 & 2,400 & 1,840 & 0 \\\hline \text { Billings on construction in progress } & 1,175 & 1,575 & 1,675 & 25 \\\hline \text { Cash collected in the year } & 1,145 & 1,555 & 1,685 & 65 \\\hline & & & & \\\hline\end{array}$
Required: (Show all dollar amounts in millions.):
a. Calculate the amount of revenue, expense and gross profit to be recognized in the accounts of Max Contractors in each of the four years.
b. If Max were to underestimate the cost to complete to be $1,690 million instead of $1,840 in Year 3, how much gross profit or loss would be recognized in each year? How much more or less gross profit or loss would be reported in that year? How much more or less gross profit or less would be reported in Year 4, and in total for all four years?
c. Explain how Max would account for this project if there were significant uncertainty over the outcome of the contract, such that Max could not clearly identify or measure the construction costs.
d. Explain what the completed contract method is, and which entities can use this approach.