Company has started a contract on 10 March with Customer X. The contract was uncompleted as at 31 December.This is a performance obligation satisfied overtime. Details of the contract as at 31 December 2017 are follows.30 May 2018S 350 000S 120 000S 110 000$ 120 000Expected completion dateTotal contract revenueCosts to 31.12.2017Estimated costs to completionPayments invoiced and receivedRequired:Calculate the amounts to be recognized for this contract in the statement of profit or loss for the year ended 31December 2017 and statement of financial position as at 31 December 2017 assuming the amount of performanceobligation satisfied is calculated using the proportion of costs incurred method.

Calculate the amounts to be recognized for this contract in the statement of profit or loss for the year ended 31 December 2017 and statement of financial position as at 31 December 2017 assuming the amount of performance obligation satisfied is calculated using the proportion of costs incurred method. nce

Calculate the amounts to be recognized for this contract in the statement of profit or loss for the year ended 31 December 2017 and statement of financial position as at 31 December 2017 assuming the amount of performance obligation satisfied is calculated using the proportion of costs incurred method. nce

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 26E

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Duke Ltd has a contract with a customer ongoing at the end of the financial year, 31 December 2020. Details of this contract are as follows:Total contract price £50,000Cost incurred to date £12,000Anticipated future costs £28,000Progress billing - Agreed price for the component completed £14,000Progress is measured using the output method under IFRS 15 Revenue from Contracts with Customers.What amount of revenue is able to be recognised for the year ended 31December 2020?a) £15,000b) £50,000c) £21,000d) £14,000
On May 10, 2017, Cosmo Co. enters into a contract to deliver a product to Greig Inc. on June 15, 2017. Greig agrees to pay the full contract price of $2,000 on July 15, 2017. The cost of the goods is $1,300. Cosmo delivers the product to Greig on June 15, 2017, and receives payment on July 15, 2017. Prepare the journal entries for Cosmo related to this contract. Either party may terminate the contract without compensation until one of the parties performs.
Horner Construction Co. uses the overtime/percentage-of-completion method. In 2014, Horner began work on a contract for $5,500,000; it was completed in 2015. The following cost data pertain to this contract: Year ended December 31 2014 2015 Costs incurred during the year $1,950,000 $1,400,000 Estimated costs to complete at the end of year 1,300,000 — The amount of gross profit to be recognized on the income statement for the year ended December 31, 2015 is? If the point in time/ cost recovery method (zeroprofit approach) of accounting was used, the amount of gross profit to be recognized for years 2014 and 2015 would be?
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In 2021, Crane Corporation began construction work under a three-year contract. The contract price is $ 480000. Crane uses the percentage-of-completion method for financial accounting purposes. The income to be recognized each year is based on the proportion of costs incurred to total estimated costs for completing the contract. The financial statement presentations relating to this contract at December 31, 2021, follow: Balance Sheet Accounts receivable—construction contract billings $ 192000 Construction in progress $ 600000 Less contract billings 480000 Costs and recognized profit in excess of billings 120000 Income Statement Income (before tax) on the contract recognized in 2021 $ 120000 How much cash was collected in 2021 on this contract? $ 480000 $ 48000 $ 288000 $ 192000