Remaining Time: 24 minutes, 29 seconds. * Question Completion Status: 4. 5 A Moving to another question will save this response. Question 3 During 2018, Capital Corp. started a construction job with a total contract price of $7,000,000. Additional data are as follows: 2018 $2,700,000 2,700,000 2,400,000 2,000,000 2019 $3,050,000 Actual costs incurred during the year Estimated remaining costs Billed to customer 4,600,000 4,800,000 Received from customer Under the cost-recovery method, what amount should Gates recognize as gross profit for 2019? $625,000 $1,250,000 $950,000 $450,000 C. D.

Company Alpha has been constructing a new piece of plant over the past 18 months which is due to come into use on 1 August 2015. The following information is available.   $ List price of materials 10,000,000 Trade discount given on materials 5% Delivery costs 500,000 Installation costs 2,000,000 Staff training 25,000 Pre production testing 100,000 A loan was taken out to finance the plant and the interest accrued on this loan is $50,000. Management invested the loan proceeds in a deposit account before it was needed which generated interest of $10,000. The asset has a useful life of 5 years and has no residual value. Show the extracts from the statement of comprehensive income for the year ended 31 December 2015 and the statement of financial position at that date. For any items not included in calculating the cost rice of the asset an explanation should be given.

Q2. Malama Limited is considering whether to continue the work on an existing contract or to terminate it now and pay an agreed penalty of K90, 000, 000 to the client. This is being considered because the penalty is less than the anticipated contract loss. The following summary has been prepared: Expenditure to date Estimated future costs to completion in one (1) years' time Material Staffing Overheads Estimated total cost Contract value Estimated loss on contract The following information is also available: K'000 other contracts. 80, 000 50,000 90,000 K'000 150,000 220,000 370,000 200,000 80,000 Material Contracts have been exchanged for the purchase of the K60, 000, 000 materials. This is special purpose material which has no alternative use. If not used on this contract it will incur disposal costs of K10, 000, 000. Staffing Two specialists are employed on the contract each at K12, 500, 000 p.a. If the contract was terminated now they would each receive K7,000, 000 redundancy pay.…

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