Entity A is a construction company, recognising progress based on work certified over total contract value Entity A will satisfy the performance obligation over time The following information relates to one of its long term contracts as at 31 May 2019, Entity As year end Contract price $200,000 Costs incurred to date $130,000 Estimated cost to complete $20,000 Invoiced to customer $120,000 Work certified to date $180,000 In the year to 31 May 2018, Entity A had recognised revenue of $60,000 and a profit of $15,000 in respect of this contract REQUIRED What profit should appear in Entity As Statement of Profit or Loss as for the period ended 31 May 2019 in respect of this contract ANSWER Contract profit Blank 1

The Answer is in the image, click to view ...

Question: Entity A is a construction company, recognising progress based on work certified over total contract value. Entity A will satisfy the performance obligation over time.

Entity A is a construction company, recognising progress based on work certified over total contract value. Entity A will satisfy the performance obligation over time. The following information relates to one of its long-term contracts as at 31 May 2019, Entity As year-end.

Contract price $200,000
Costs incurred to date $130,000
Estimated cost to complete $20,000
Invoiced to customer $120,000
Work certified to date $180,000

In the year to 31 May 2018, Entity A had recognised revenue of $60,000 and a profit of $15,000 in respect of this contract.

REQUIRED:

What profit should appear in Entity As Statement of Profit or Loss as for the period ended 31 May 2019 in respect of this contract?

ANSWER:

Contract profit = Blank 1

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

Hattem Co is a construction business, recognising progress based on work certified as a proportion of total contract value. Hattem Co will satisfy the performance obligation over time. The following...

Selling Price Invoice date Customer Name Relationship Gross Amount in Local Currency Amount in doc. curr. Document currency Description Net due date 5 15/8/2020 Jerome Third Party 78,154.00 1,563.00...

Entity A is a construction company listed in Hong Kong. To maintain consistency, it always recognises progress based on work certified over total contract value. For a long-term contract, Entity A...

is my answers correct ? for a finance cale with no savage value or bargain purchase option the amount recorded initially by the lesses aliability should normally Select one O biceed the total of the...

Identify two important accounting standards/policies/ procedures discussed in the note.(Accounting policies that the company is using) Discuss your reasons for believing that these two items would be...

Entity A is a construction company listed in Hong Kong. It commenced a contract to build a bridge for Entity B in the year ended 30 September 2020. The contract price was agreed at $2,800 million and...

I have no idea how to start the cash flow operations analysis in part 1 Enron Annual Report 2000 Enron Annual Report 2000 Enron manages efficient, flexible networks to reliably deliver physical...

Which of the following is not an indicator that revenue can be recognized over time? A. The seller is enhancing an asset that the buyer controls as the service is performed. B. The customer consumes...

For the gate of Prob. 2.55 above, stop B breaks if the force on it equals 9200 lbf. For what water depth h is this condition reached?

What will happen to a companys break-even point if the sales price and unit variable cost of its only product increase by the same dollar amount?

3. Briefly describe the FOR directive.

SIMAD UNIVERSITY Class: BACC25 Subject: Islamic Accounting Instructions: a) Follow The Instructions. Midterm Exam Instructor: All Ibrahim Date: 6-4-2022 b) You Have 1.5 Hrs. To Complete This Test. c)...

Flexibility. Organizations are introducing new working patterns and abandoning some traditional ones, influenced by economic transformation and savings in labour costs; however, part-time working has...

Recruitment and redundancy. Skills shortages as a result of loss of employees and lower wages in the state- and former state-owned organizations has led to targeting of school leavers, the long-term...

Underestimation of the complexities of a free market, with a tendency to rely on imported solutions. Western managers, they recommend, should encourage a blend of HRM involving both free market...