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Question:
Agreed contract price 1,200
Estimated total cost of contract at commencement 900
Estimated total cost at 31 March 2006 1,250
Agreed value of work completed at 31 March 2006 840
Progress billings invoiced and received at 31 March 2006 880
Contract costs incurred to 31 March 2006 720The agreed value of the work completed at 31 March 2006 is considered to be equal to the revenue earned in the year ended 31 March 2006. The percentage of completion is calculated as the agreed value of work completed to the agreed contract price.
Answer given:
Statement of Profit or Loss
Contract revenue 840
Contract expenses 720
Expected loss recognised 170
Attributable loss 50My answer:
Contract revenue 840
Contract expenses 875
Expected loss recognised 15
Attributable loss 50How to get the 720 and 170?
“Statement of Profit or Loss
Contract revenue 840
Contract expenses 720
Expected loss recognised 170
Attributable loss 50”In my workings, the figures are as follows:
Revenue recognised 70% x 1,200 840
Costs recognised (balancing figure) 890Loss recognised ( 50)
Here’s what you have quoted to me “How to get the 720 and 170?”
The total is 890, as per my workings
The reason for the 720 is that that is the costs to date and ….
….. the reason for the 170 is to push that 720 up to 890 and thus recognise the 50 anticipated loss in fullOK?
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