Nangka Bhd entered into a new construction project with a contract price of RM1,000,000 on 1...

 

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Nangka Bhd entered into a new construction project with a contract price of RM1,000,000 on 1 October 2021. The contract's performance obligations are satisfied over time and Nangka Bhd has an enforceable right to payment for performance completed to date. The following information relates to this contract as at financial year ended 30 September 2022: Amounts invoiced Amount paid up Costs incurred to date Estimated costs to complete the contract RM'000 250 180 240 560 Nangka Bhd recognises revenues and profits on construction contracts based on proportion of cost incurred method. 1. (a) Compute the total estimated profits for the contract. (4 marks) (b) Show extract of Statement of Profit or Loss for the year ended 30 September 2022. (6 marks) 2. (a) Show extract of Statement of Financial Position as at 30 September 2022. (6 marks) (b) Nangka Bhd has some other projects ongoing and would need advice on the accounting treatment for the following two projects: i. Project X - total contract cost is expected to exceed the contract price (2 marks) ii. Project Y - due ongoing legal issues, Nangka Bhd is uncertain of the outcome of the project. Nangka Bhd entered into a new construction project with a contract price of RM1,000,000 on 1 October 2021. The contract's performance obligations are satisfied over time and Nangka Bhd has an enforceable right to payment for performance completed to date. The following information relates to this contract as at financial year ended 30 September 2022: Amounts invoiced Amount paid up Costs incurred to date Estimated costs to complete the contract RM'000 250 180 240 560 Nangka Bhd recognises revenues and profits on construction contracts based on proportion of cost incurred method. 1. (a) Compute the total estimated profits for the contract. (4 marks) (b) Show extract of Statement of Profit or Loss for the year ended 30 September 2022. (6 marks) 2. (a) Show extract of Statement of Financial Position as at 30 September 2022. (6 marks) (b) Nangka Bhd has some other projects ongoing and would need advice on the accounting treatment for the following two projects: i. Project X - total contract cost is expected to exceed the contract price (2 marks) ii. Project Y - due ongoing legal issues, Nangka Bhd is uncertain of the outcome of the project.

Answer rating: 100% (QA)

1 a Compute the total estimated profits for the contract Total estimated profits Amounts invoiced Am... View the full answer