a. Define bill and hold sale and explain when revenue is recognized in this situation according to
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Question:
a. Define “bill and hold sale” and explain when revenue is recognized in this situation according to MFRS 118.
b. In 2016, STEPH Construction Company agreed to construct an apartment building at a price of RM2,200,000. The information relating to the costs and billings for this contract is shown below:
2016 RM | 2017 RM | |
Costs incurred to date | 380,000 | 700,000 |
Estimated costs yet to be incurred | 620,000 | 300,000 |
Customer billings to date | 250,000 | 600,000 |
Collection of billings to date | 220,000 | 420,000 |
REQUIRED:
Assuming that the percentage-of-completion method is used, compute the amount of gross profit to be recognized in 2016 and 2017 (showing the calculation is required).
Related Book For
Intermediate Accounting principles and analysis
ISBN: 978-0471737933
2nd Edition
Authors: Terry d. Warfield, jerry j. weygandt, Donald e. kieso
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