REA Company signed a three-year contract to provide sales training to the employees of Chili Company. The contract price is €1 400 per employee and the estimated number of employees to be trained is 300. The expected number to be trained in each year and the expected training costs follow. Payment is made as €210 000, €126 000 and €84 000 in 2014, 2015 and 2016 respectively 2014 2015 2016 Total Number of employees 100 100 100 300 Training costs incurred €55.000 €40 000 €50.000 €145.000 Requirement For each year, compute the revenue and expenses reported assuming revenue is recognised using the percentage-of-completion method, where percentage- of-completion is determined by the costs incurred. Round the final answer to the nearest integer

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Income statement
REA Company signed a three-year contract to provide sales training to the employees
of Chili Company. The contract price is €1 400 per employee and the estimated number
of employees to be trained is 300. The expected number to be trained in each year and
the expected training costs follow. Payment is made as €210 000, €126 000 and €84 000
in 2014, 2015 and 2016 respectively
2014
2015
2016
Total
Number of employees
100
100
100
300
Training costs incurred
€55.000
€40 000
€50.000
€145.000
Requirement For each year, compute the revenue and expenses reported assuming
revenue is recognised using the percentage-of-completion method, where percentage-
of-completion is determined by the costs incurred Round the final answer to the nearest
integer
Transcribed Image Text:Income statement REA Company signed a three-year contract to provide sales training to the employees of Chili Company. The contract price is €1 400 per employee and the estimated number of employees to be trained is 300. The expected number to be trained in each year and the expected training costs follow. Payment is made as €210 000, €126 000 and €84 000 in 2014, 2015 and 2016 respectively 2014 2015 2016 Total Number of employees 100 100 100 300 Training costs incurred €55.000 €40 000 €50.000 €145.000 Requirement For each year, compute the revenue and expenses reported assuming revenue is recognised using the percentage-of-completion method, where percentage- of-completion is determined by the costs incurred Round the final answer to the nearest integer
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