3. The following details apply to a contract where performance obligations are satisfied over time at 31 December 2015. Total contract revenue Costs to date Estimated costs to 40,000 completion Amounts invoiced 70,000 Amount paid up to 45,000 31.12.2015 The contract is agreed to be 40% complete at 31 December 2015. 100,000 50,000 Required: Show how a contract would be reflected in the statement of financial position and in the statement of profit or loss at 31 December 2015 under IFRS 15 Revenue from contracts with customers.

3. The following details apply to a contract where performance obligations are satisfied over time at 31 December 2015. Total contract revenue Costs to date Estimated costs to 40,000 completion Amounts invoiced 70,000 Amount paid up to 45,000 31.12.2015 The contract is agreed to be 40% complete at 31 December 2015. 100,000 50,000 Required: Show how a contract would be reflected in the statement of financial position and in the statement of profit or loss at 31 December 2015 under IFRS 15 Revenue from contracts with customers.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Assume Nortel Networks contracted to provide a customer with Internet infrastructure for $2,860,000. The project began in 2021 and was completed in 2022 Data relating to the contract are summarized below: 2021 $ 372,000 $1,899,00e 1,488,eee 524,000 318,eee 2022 Costs incurred during the year Estimated costs to complete as of 12/31 Billings during the year Cash collections during the year 2,336,800 2,542, 000 Required: 1. Compute the amount of revenue and gross profit or loss to be recognized in 2021 and 2022 assuming Nortel recognizes revenue over time occording to percentege of completion. 2. Compute the amount of revenue and gross profit or loss to be recognized in 2021 and 2022 ssuming this project does not qualify for revenue recognition over time. 3. Prepare a partial balance sheet to show how the information related to this contract would be presented ot the end of 2021 assuming Nortel recognizes revenue over time according to percentege of completion. 4. Prepare a partial…
A company uses the percentage-of-completion method of accounting. In 2020, the company began work a project, which had a contract price of $23,700. Other details follow: 2020 2021 Costs incurred to date $6,000 $18,000 Estimated costs to complete, as of December 31 14,000 -0- Billings to date 11,350 17,460 Collections to date 9,390 16,260 At the end of 2020, what is the inventory/current liability related to the construction of this project? (Very important: if the company reports a current liability, then put a minus sign in front of the amount. If the company reports an inventory, then no plus or minus sign is needed.) (Do not round your answers in any part of the computation.)
A company enters into a contract with a customer to build a building, with a performance bonus of $33,500 if the building is completed by September 30, 2021. The bonus is reduced by $5,000 each week that completion is delayed. The company commonly includes these completion bonuses in its contracts and, based on prior experience, estimates the following completion outcomes: Completed by ProbabilitySeptember 30, 2021 70%October 7, 2021 15%October 14, 2021 10%October 21, 2021 5%The amount of revenue the company should recognize related to this bonus is $_______________.
4. In 2016, Omega Construction began work on a contract with a price of $850,000 and estimated costs of $595,000. Data for each year of the contract are as follows: Costs incurred during the year $238,000 Estimated costs to complete Partial billings Collections 2016 2017 2018 $319,600 $105,000 357,000 139,400 -0- 260,000 210,000 380,000 240,000 200,000 410,000 Assuming the performance obligation is satisfied over time, what would be the gross profit in 2016? a. $102,000 b. $260,000 c. $255,000 d. $425,000
Use the percentage-completion method and show all calculations and explanation in detail.
Big Construction Company signs a contract on 1 July 2019, agreeing to build a warehouse for Buyer Corporation Ltd at a fixed contract price of $10 million. Buyer Ltd will be in control of the asset throughout the construction process. Big Construction Company estimates that construction costs will be as follows: 2019 2.5 million 2020 $4 million 2021 $1.5 million The contract provides that Buyer Corporation Ltd will make payments on 31 December each year as follows: 2019 $2 million 2020 $5 million 2021 $3 million The contract is completed and accepted on 31 December 2021. Assume that actual costs and cash collections coincide with expectations and that cost (an input measure) is used as the basis for assessing progress on the construction contract. Big Construction Company has a financial year ending 31 December. Required: Using the above data, compute the gross profit to be recognised for each of the three…
ABC Co. estimates total contract costs at completion d In 20x2. ABC incurs actual costs of P2.45M and revizes its ABC completes the construction in 20x3 The actual total 6. In 20x1, ABC Co. enters into a contact with a customer for the uses the cost-to-cost method in measuring its progress on the estimate of total contract costs at completion to P4.6M. construction of a building. The contract price is P6M. ABC Co. me contract. cost of the contract is P4.5M. How much is the profit recognized in 20x3? a. 420,000 b. 450,000 c 500,000 d. 550,000
Shumpert, Inc. entered into a contract that was to take two years to complete, with an estimated cost of $2,257,600. The contract price was $3,160,640. Costs of the contract for 2014, the first year, totaled $1,693,200. a. What was the gross profit reported by the percentage of completion method for 2014?
Answer is $1,800,000. Please explain the reasoning and calculations
Nadeem BSC is a civil engineering company. It started work on to civil engineering projects during the year ended 31 December 2020. The nature of both contracts is that the customer controls the asset as the project goes forward. Work is certified by a surveyor as performance obligations are completed. The following figures relate to those projects at the end of the reporting period. Qadim Bypass Hidd Mall BD’000 BD’000 Contract Price 18,000 16,000 Costs incurred to date 2,800 5,800 Estimated costs to completion 11,200 10,400 Value of work certified to date 5,600 6,000 Progress billing 5,200 6,800 An old disused oil well has been discovered under the site for the Hidd Mall and the costs of dealing with this have been taken into account in the calculation of estimated costs to completion. Nadeem BSC’s lawyers are reasonably confident that the customer will have to bear the additional costs which will be incurred in stabilising…