Pocket Projects Ltd is a company specialising in the construction of schools for the Eastern Cape...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Pocket Projects Ltd is a company specialising in the construction of schools for the Eastern Cape government. They were awarded a contract to construct a two-storey building in Butterworth. A contract price of R12 800 000 was agreed upon and work commenced on 2 March 2021. It was expected that the building would be completed in two and a half years and that total costs would amount to R9 600 000. At year-end 30 November 2021 actual costs incurred totalled R3 000 000, remaining costs were estimated at R6 600 000 and Pocket Projects Ltd had received billings to date of R4 480 000. The performance obligation will be satisfied over time and as such, Pocket Projects Ltd recognises revenue using the percentage of completion method based on time elapsed since the start of the project to the total expected time. Required: Establish what the value for contracts with customers will be that Pocket Projects Ltd should present in their statement of financial position on 30 November 2021. Indicate clearly whether this will be a contract asset or a contract liability. Show all your workings to calculate the amount presented. Round to the nearest rand. Pocket Projects Ltd is a company specialising in the construction of schools for the Eastern Cape government. They were awarded a contract to construct a two-storey building in Butterworth. A contract price of R12 800 000 was agreed upon and work commenced on 2 March 2021. It was expected that the building would be completed in two and a half years and that total costs would amount to R9 600 000. At year-end 30 November 2021 actual costs incurred totalled R3 000 000, remaining costs were estimated at R6 600 000 and Pocket Projects Ltd had received billings to date of R4 480 000. The performance obligation will be satisfied over time and as such, Pocket Projects Ltd recognises revenue using the percentage of completion method based on time elapsed since the start of the project to the total expected time. Required: Establish what the value for contracts with customers will be that Pocket Projects Ltd should present in their statement of financial position on 30 November 2021. Indicate clearly whether this will be a contract asset or a contract liability. Show all your workings to calculate the amount presented. Round to the nearest rand.
Expert Answer:
Answer rating: 100% (QA)
For Contract Revenue recognition accounting standards suggest two methods Percenta... View the full answer
Related Book For
Niebels Methods, Standards and Work Design
ISBN: 978-0073376318
13th edition
Authors: Andris Freivalds, Benjamin Niebel
Posted Date:
Students also viewed these accounting questions
-
The two members used in the construction of an aircraft fuselage are joined together using a 30° fish-mouth weld. Determine the average normal and average shear stress on the plane of each weld....
-
In the construction of railroads, it is important that curves be gentle, so as not to damage passengers or freight. Curvature is not measured by the radius of curvature, but in the following way....
-
In the construction of the flow process chart, what method can be used to estimate distances moved?
-
In an organization, managers communicate information downward to their departments and teams, and employees communicate information upward to their managers. If all members of an organization are not...
-
How does the presence of a reader comments feature on a corporate blog reflect audience-centered communication?
-
Annette Pachelo recently opened her own law office on March 1, which she operates as a sole proprietorship. The name of the new entity is Annette Pachelo, Attorney. Pachelo experienced the following...
-
Describe the working of (a) screw pump (b) vane pump (c) hydraulic jacts (d) hydraulic lift.
-
Sophisticates, Inc., a distributor of jewelry throughout California, is in the process of assembling a cash budget for the first quarter of 20x1. The following information has been extracted from the...
-
How can I enhance this statement, to include the following skillsets/professional skills/generic skills, how can i quantify my skills? Throughout my nineteen years of experience providing customer...
-
Trish Himple owns a retail family clothing store. Her store is located at 4321 Heather Drive, Henderson, NV 89002. Her employer identification number is 95- 1234321 and her Social Security number is...
-
Write f = u + iv and assume that f has a derivative at each point of an open disk D centered at (0, 0). If au 2 + bv 2 is constant on D for some real a and b, not both 0, prove that f is constant on...
-
The illumination lights in an operating room use a concave mirror to focus an image of a bright lamp onto the surgical site. One such light has a mirror with a focal length of \(15.0 \mathrm{~cm}\)....
-
Martha is viewing a distant mountain with a telescope that has a \(120-\mathrm{cm}\)-focal-length objective lens and an eyepiece with a \(2.0 \mathrm{~cm}\) focal length. She sees a bird that's \(60...
-
A \(2.0-\mathrm{cm}\)-tall object is \(\mathbf{1 5} \mathrm{cm}\) in front of a converging lens that has a \(20 \mathrm{~cm}\) focal length. Calculate the image position and height.
-
Some pipe organs create sounds lower than humans can hear. This "infrasound" can still create physical sensations. What is the fundamental frequency of the sound from an open-open pipe that is 32...
-
A small positive charge \(q\) experi- \(\quad \vec{E}_{1} \quad \vec{E}_{2}=2 \vec{E}_{1} \quad \vec{E}_{3}=3 \vec{E}_{1}\) ences a force of magnitude \(F_{1}\) when placed at point 1 in Figure...
-
Peer and self evaluation should be completed immediately after your group has turned in its oral recorded presentation when you will be able to assess total individual group member participation....
-
Using the information in P11-2B, compute the overhead controllable variance and the overhead volume variance. Data From Problem 11-2B: Huang Company uses a standard cost accounting system to account...
-
Explain how a proper work surface height would be determined.
-
An engineer was adjusting the gear box of a large steam engine while it was in operation and dropped a wrench into the path of the gears. As a result the engine was thrown out of alignment and badly...
-
Operators assemble pumps at an hourly rate of $10.00. The standard time for the assembly is 20 minutes. Direct material costs are $19.50/pump. Indirect labor and other overhead is calculated simply...
-
The radius of curvature of one surface of a glass lens \((n=1.45)\) is \(1.50 \mathrm{~m}\). If sunlight is focused at a point \(0.300 \mathrm{~m}\) away from the lens, what is the radius of...
-
A plano-convex lens has a focal length of \(170 \mathrm{~mm}\), and the material of which the lens is made has an index of refraction of 1. 6. What is the radius of curvature of the convex surface?
-
The two surfaces of a double convex, thin lens made of plastic each have an absolute value of radius of curvature of \(1.8 \mathrm{~mm}\). If the focal length of the lens is \(4.5 \mathrm{~mm}\),...
Study smarter with the SolutionInn App