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    20 Preparation Question: Contract: Contract 1 Contract 2 Contract 3 Contract 4

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    Serena
    The document provides details of 4 construction contracts including revenue, costs to date, estimated costs to completion, work invoiced, cash received, start and estimated completion dates, and percentage complete. It asks the reader to calculate amounts for the statement of profit or loss and statement of financial position based on the information provided for each contract.

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    20 Preparation Question: Contract: Contract 1 Contract 2 Contract 3 Contract 4

    Uploaded by

    Serena
    62 views2 pages
    The document provides details of 4 construction contracts including revenue, costs to date, estimated costs to completion, work invoiced, cash received, start and estimated completion dates, and percentage complete. It asks the reader to calculate amounts for the statement of profit or loss and statement of financial position based on the information provided for each contract.

    Original Title

    Ifrs 15 Contract

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    The document provides details of 4 construction contracts including revenue, costs to date, estimated costs to completion, work invoiced, cash received, start and estimated completion dates, and percentage complete. It asks the reader to calculate amounts for the statement of profit or loss and statement of financial position based on the information provided for each contract.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    62 views2 pages

    20 Preparation Question: Contract: Contract 1 Contract 2 Contract 3 Contract 4

    Uploaded by

    Serena
    The document provides details of 4 construction contracts including revenue, costs to date, estimated costs to completion, work invoiced, cash received, start and estimated completion dates, and percentage complete. It asks the reader to calculate amounts for the statement of profit or loss and statement of financial position based on the information provided for each contract.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    You are on page 1of 2

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    com

    20 Preparation question: Contract


    The following details are as at 31 December 20X5
    Contract Contract Contract Contract
    1 2 3 4
    Total contract revenue $120,000 $72,000 $240,000 $500,000
    Costs to date $48,000 $8,000 $103,200 $299,600
    Estimated costs to completion $48,000 $54,000 $160,800 $120,400
    Work invoiced to date $50,400 – $76,800 $345,200

    m
    Cash received to date $40,000 – $60,000 $320,000
    Date started 1.3.20X5 15.10.20X5 1.7.20X5 1.6.20X4
    Estimated completion date 30.6.20X6 15.9.20X6 30.11.20X6 30.7.20X6

    .co
    % complete 45% 10% 35% 70%
    These are all contracts where performance obligations are satisfied over time. You are to assume that profit
    accrues evenly over each of the contracts.

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    The statement of profit or loss for the previous year showed revenue of $225,000 and expenses of $189,000 in

    ial
    relation to Contract 4.
    The company considers that the outcome of a contract cannot be estimated reliably until a contract is 25%
    complete. It is, however, probable that the customer will pay for costs incurred so far.

    ter
    Required
    Calculate the amounts to be included in the statement of profit or loss for the year ended 31 December 20X5 and
    the statement of financial position as at that date.
    Contract 1 Contract 2 Contract 3 Contract 4
    $
    a $ $ $
    Statement of profit or loss
    ym
    Revenue
    Expenses
    Expected loss
    Recognised profit/(loss)
    tud

    Statement of financial position


    Contract assets/liabilities
    Contract costs incurred to date
    Recognised profits less recognised losses
    as

    Less amounts invoiced to date

    Trade receivables
    cc

    Amounts invoiced to date


    Less cash received

    Workings
    ea
    fre

    Questions 23

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    2 Deferred income $
    240,000
    Grant received ($800,000  30%)
    Release for this year ($240,000  10%  6/12) (12,000)
    Total balance at year-end 228,000
    Presentation
    Current liability ($240,000  10%) 24,000
    Non-current liability (balance) 204,000
    228,000

    m
    Theoretical approach under the Conceptual Framework
    Because the 'deferred' element of the grant cannot be recognised as a liability, the grant will be claimed in
    full in the year that it is received. The repayment clause will not affect this policy because, at the end of the

    .co
    reporting period, Derringdo has not sold the asset and so no liability exists.

    STATEMENT OF PROFIT OR LOSS


    $

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    Operating expenses

    ial
    Depreciation charge (as before) 34,000
    Grant received and claimed (240,000)
    (206,000)
    STATEMENT OF FINANCIAL POSITION

    ter
    $
    Non-current assets
    Property, plant and equipment 766,000

    20 Preparation question: Contract


    a
    ym
    Contract 1 Contract 2 Contract 3 Contract 4
    $ $ $ $
    STATEMENT OF PROFIT OR LOSS
    (W1) (W2) (W3) (W4)
    Revenue 54,000 8,000 84,000 125,000
    tud

    Expenses (43,200) (8,000) (92,400) (105,000)


    Expected loss – – (15,600) –
    Recognised profit/(loss) 10,800 – (24,000) 20,000

    Contract asset
    as

    Contract costs incurred 48,000 8,000 103,200 299,600


    Recognised profits less recognised losses 10,800 – (24,000) 56,000
    58,800 8,000 79,200 355,600
    cc

    Less amounts invoiced to date (50,400) – (76,800) (345,200)


    8,400 8,000 2,400 10,400

    Trade receivables
    ea

    Amounts invoiced to date 50,400 – 76,800 345,200


    Less cash received (40,000) – (60,000) (320,000)
    10,400 – 16,800 25,200
    fre

    134 Answers

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