Corus Corporation builds large cruise ships on a contract basis. The company uses the percentage of completion method of revenue recognition. The following information pertains to the construction contracts it had in place as of the December 31, 2012 year-end.

Required:
a. Calculate the revenue to be recognized in 2012.
b. While examining the Corns financial statements, the auditors noted that there was an error in the estimate of costs to complete the contracts in 2011. The €œcost to complete€ should have been S792m instead of $612m. In light of this evidence, how much revenue should be recognized in 2012?

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2011 $108m 612m Total price of contracts outstanding Decemb,2012 960m 144m 2012 S320m 480m 060m Cost incurred to date Cost to complete contracts Revenue