Question: Question 2 25 Marks The percentage of completion method (based on costs) is used to calculate profit on contracts, but only once contracts are 30%

Question 2 25 Marks

The percentage of completion method (based on costs) is used to calculate profit on contracts, but only once contracts are 30% or completed or more.

REQUIRED:

2.1 Discuss the difference between the Work Certified Method and the Percentage of C0mpletion method. (6)

2.2 Calculate the profit/loss that can be brought into account for the financial period under review for each of the contracts in the records of Ovitoto Concrete Investment Cc. (19 . the table to use is below

Ovitoto Concrete Investment Cc presented you with the following information for the contracts awarded in Sept 2017; Contract
Okahandja Road		Midgard Road
Contract Price	1 499 500		1 950 550
Work certified	1 249 500		1 550 550
Cost of work certified	1 199 500		1 400 550
Cost of uncertified work	999 500		1 210 550
Cash received	1 149 500		1 400 550
Total expected cost (including costs incurred)	1 299 500		1 850 550

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