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On 1 January 2020, ABD Ltd signed a contract worth $6,000,000 to construct a light rail. The complex was to be built over three years, with progress payments of $2,000,000 to be made at the end of each year. Estimated costs were $4,500,000 and the following costs incurred and paid by ABD Ltd were in accordance with estimates and represented the percentage completed in each year (Assume no tax): $1,000,000 in 2020, $1,250,000 in 2021, and $2,250,000 in 2022. The project will be completed in December 2022.
problem 1: Using the percentage of completion method, how much profit will ABD report for the financial year ended 31 December 2022? (assume for this question, the financial year starts on 1 January 2022 and ends on 31 December 2022)
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