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

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

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter17: Advanced Issues In Revenue Recognition

Section: Chapter Questions

Problem 10C

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Tullis Construction enters into a long-term fixed price contract to build an office tower for $10,200,000. In the first year of the contract Tullis incurs $3,000,000 of cost and the engineers determined that the remaining costs to complete the project are $5,000,000. Tullis billed $4,000,000 in year 1 and collected $3,200,000 by the end of the end of the year. How should Tullis report Construction in Progress and Billings on Construction in Progress at the end of year 1 on the balance sheet assuming the use of the completed-contract method?
Bridgenorth has undertaken a $5 million contract to repair a railway tunnel. The contract was signed on 1 April 20X8 and the work is expected to take two years. This is a contract where performance obligations are satisfied over time and progress in satisfying performance obligations is to be measured according to % of work completed as certified by a surveyor. Bridgenorth has an enforceable right to payment for performance completed to date. At 31 December 20X9 the details of the contract were as follows: 20X9 20X8 $ $ Total contract value 5,000,000 5,000,000 Costs to date 3,600,000 2,300,000 Estimated costs to completion 700,000 2,100,000 Work invoiced to date 3,000,000 2,000,000 Cash received to date 2,400,000 1,500,000 % certified complete 75% 40% What is the profit recognised for the year ended 31 December 20X8?
JUBAIL BUILDERS is constructing a multi-unit residential complex. In the prior year, JUBAIL BUILDERS entered into a contract with a customer for a specific unit that is under construction. JUBAIL has determined that the contract is a single performance obligation satisfied over time. JUBAIL BUILDERS gathered the following information for the contract during the year. JUBAIL BUILDERS-Year Ended December 31, 2018: Costs to date 10,500,000 Future expected costs 7,000,000 Work certified to date 12,600,000 Expected Sales value 22,400,000 Revenue taken in earlier period 8,400,000 Costs taken in earlier periods 6,650,000 Calculate the amounts to be included in the statement of profit or loss in respect of revenue and costs for the year ended December 31, 2018 on both methods (I) Input Method (cost basis), and (II) Output Method (Sales Basis) Calculate the total expected profit for the year 2018?
Tullis Construction enters into a long-term fixed price contract to build an office tower for $10,600,000. In the first year of the contract Tullis incurs $3,000,000 of cost and the engineers determined that the remaining costs to complete the project are $5,000,000. Tullis billed $5,000,000 in year 1 and collected $3,100,000 by the end of the end of the year. How should Tullis report Construction in Progress and Billings on Construction in Progress at the end of year 1 on the balance sheet assuming the use of the completed - contract method? O A. asset of $2,000,000 O B. liability of $1,900,000 O C. asset of $1,900,000 O D. liability of $2,000,000
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On January 1, 2016, AVIDA was contracted to construct a townhouse for SM Corp. for a total contract price of P50,400,000. The building was completed by November 31, 2018. The following are the data of AVIDA: 2017 2018 Contract cost incurred during the year 19,200,000 15,600,000 8,700,000 Estimated cost at completion 38,400,000 43,500,000 43,500,000 Billing during the year 19,200,000 21,000,000 10,200,000 The entry to record the recognized profit in 2018 includes credit to Contract cost 8,700,000 CIP 50,400,000 CIP 1,380,000 Contract revenue 10,080,000
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On January 1, 2041, DMCI Inc. accepted a long-term construction project to construct a building with an initial contract price of P10,000,000. The outcome of the construction project can be estimated reliably and the contractor decided to employ cost to cost method. During 2043, the contract price increases due to the change in the project design. The following data are provided by the accountant and project manager concerning the construction costs for the three years of construction: 12/31/2043 Year 12/31/2041 12/31/2042 Cumulative costs incurred as of the end of the P1,000,000 P10,800,000 year Realized gross profit/(loss) during the year ? P350,000 (P1,600,000) Percentage of completion as of the end of the 12.5% 60% 90% year What is DMCI Inc.'s Cost of Construction Revenue to be recognized in its Income Statement for the year ended December 31, 2043?
On January 1, 2011, DMCI Inc. started the construction of a building with a fixed contract price of P10,000,000. The outcome of the construction project can be estimated reliably and the contractor decided to employ cost to cost method. The following data are provided by the accountant and project manager concerning the construction costs for the three years of construction: Year 12/31/2011 12/31/2012 12/31/2013 Costs incurred during the year ? P1,500,000 P3,740,000 Realized gross profit/(loss) during the year P750,000 (P250,000) (P800,000) Percentage of completion as of the end of the year 37.5% 50% 80% What is the balance of Construction in Progress on DMCI Inc.’s Statement of Financial Position on December 31, 2013? A. 7,480,000 B. 7,940,000 C. 8,000,000 D. 8,280,000