Question: please elaborate your answer to the highest degree possible for better understanding. thank you Question 3: (8 Marks) MHL entered into a contract of manufacturing

please elaborate your answer to the highest degree possible for better understanding. thank you

Question 3: (8 Marks) MHL entered into a contract of manufacturing of a mainframe for MoskoChickna Ltd (MCL) on 1 January 2019 for which the contract price was determined to be Rs.200,000. MHL's estimated cost for this contract is Rs.120,000. The project was to be completed in 14 months. MHL measures performance on the basis of cost incurred. At the end of seventh month MHL and MCL agreed to modify the contract by adding the construction of a super computer at an additional cost of Rs.250,000. The additional cost of modification is estimated at Rs.180,000 for MHL. MHL had incurred Rs.62,000 by the end of seven months and Rs.81,000 and Rs.58,000 for mainframe and super computer respectively (in total) by the end of the year Required Advise MHL regarding the treatment of above matter and pass journal entries for the year ended 31 December 2019

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