7 months below, starting from the signing of the contract, bringing the total price of the contract to $100,000, assuming that the contractor has guaranteed a profit of 15%. The contractor was one month late in completing the contract, so he had to pay ($100) for each day of delay (assuming the month is 30 days) (the maintenance period begins after completing the work) It is required to complete the cash flow and net cash flov calculations and find the largest amount that is required to be provided by the contractor and the date the amount is needed Note that the contractor is entitled to an advance every month, and the procedures for paying the advance take two months. The table below shows the value of the work done for each month. End of month Monthly Value of work *1000$ 1 13

7 months below, starting from the signing of the contract, bringing the total price of the contract to $100,000, assuming that the contractor has guaranteed a profit of 15%. The contractor was one month late in completing the contract, so he had to pay ($100) for each day of delay (assuming the month is 30 days) (the maintenance period begins after completing the work) It is required to complete the cash flow and net cash flov calculations and find the largest amount that is required to be provided by the contractor and the date the amount is needed Note that the contractor is entitled to an advance every month, and the procedures for paying the advance take two months. The table below shows the value of the work done for each month. End of month Monthly Value of work *1000$ 1 13

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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We have given the contract to an agency for the value of 17 Cr for the duration of 7 month with the LD clause of 0.5% of total contract price for each week's delay or part thereof, subject to maximum of 5% of total contract price. But agency has completed only 9 Cr in 10 month duration and closed the work, in this case how will calculate the LD amount?
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 $_______________.
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