CN started a three-year contract to build a new university campus on 1 April 20X4. The contract had a fixed price of $90 million. CN will satisfy the performance obligation over time. CN incurred costs to 31 March 20X5 of $77 million and estimated that a further $33 million would need to be spent to complete the contract. CN measures the progress of contracts using work completed compared to contract price. At 31 March 20X5, a surveyor valued the work completed to date at $63 million. Select the correct amounts to be shown in revenue and cost of sales in the statement of profit or loss for the year ended 31 March 20X5? Revenue Cost of sales $63 million $77 million $57 million $83 million

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

CN started a three-year contract to build a new university campus on 1 April 20X4. The contract had a fixed price of $90 million. CN will satisfy the performance obligation over time. CN incurred costs to 31 March 20X5 of $77 million and estimated that a further $33 million would need to be spent to complete the contract.

CN measures the progress of contracts using work completed compared to contract price.

At 31 March 20X5, a surveyor valued the work completed to date at $63 million.

Select the correct amounts to be shown in revenue and cost of sales in the statement of profit or loss for the year ended 31 March 20X5?

Revenue Cost of sales

$63 million $77 million

$57 million $83 million

Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Accounting for Long-Term contracts
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education