A company is commissioned to build an airport, starting at January, 1 year 01. The building is finished three years later (December, 31 year 03). The contract price was originally agreed to be  200 million but for some extra work the final sales price increases in 03 to  250 million. The company calculated the costs in million in each year as follows: Year 01:  50 m., year 02:  60 m., year 03:  60 m. The costs incurred to date at 31 Dec. 02 included  10 m. spent on materials for use during work in period 01. Calculate the revenue and expenses arising from the contract that should be recognized in the FS in the years 01-03. Which profits are reported in the Statement of Profit or Loss in every period, if the Percentage-of-completion method is used?

Answer rating: 100% (QA)

The percentageofcompletion method recognizes income and expenses related to longterm projects in proportion to the work completed each period This met... View the full answer