[flisa]

Thank you !!!

[flisa]

Hello mr Mike , Contract price 2 000000.60% complete.

[flisa]

Also I can’t to get correct answer for other test question for cost recognise ??

Contract cost 2 000 000 $ .cost incurred to date 1 300 000 $ includes period specific
50 000 $.cost to complete 400 000 $. The correct answer is cost recognised 1040 000 $

Anybody can help?

[flisa]

Hello ,earlier I asked the same question from mister Mike and he was very kind to explain,this is his explanation :

A 2m contract, 50,000 period specific, other costs to date of 1,550,000 and further costs to complete of 550,000. That gives TOTAL costs on the contract of 1,550 + 50 + 550 = 2,150 and the contract I guess was for $2,000,000
Revenue recognised 80% * 2,000,000 = 1,600,000

Period specific 50,000
General costs ?

Forecast loss $150,000

Therefore costs to be recognised are $1,600,000 + $150,000 = $ 1,750,000

Where losses are forecast, we take account of the entire forecast loss

In addition, when dealing with the period specific costs, we take 100% of those in the year to which they relate

Is that ok now?

[flisa]

Thanks alot for your time !

[flisa]

Thank you Mike for your answer , but it was other Q for revenue and cost recognition .
As I remember it was 1 600 000 – cost of contract at date, include 50 000 period s..,
550 000 to complete contract , 80 % complete.
So my wrong calulation is (1 600 000 + 550 000) x 80%= 1 720 000.The correct answer shows 1 750 000.

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