[zumi]

On 1 October 20X2, Pricewell Co entered into a contract to construct a bridge. The total contract price was $50m and construction is expected to be completed on 30 September 20X4. The contract is expected to generate a profit for Pricewell Co. The customer obtains control of the bridge as construction takes place. Costs to date are:
Allocation of management time to obtain contract 2m
Materials, labour and overheads 12m
Depreciation of specialist plant and machinery 3m

The value of the work completed at 31 March 20X3 has been agreed at $22m and the estimated cost to complete is $10m. Pricewell Co recognises satisfaction of performance obligations determined by the value of work completed to date.
What is the profit recognised in respect of the contract at 31 March 20X3?
$5,000,000
$7,000,000
$25,000,000
O $Nil

shouldnt the answer to this question be $5,000,000?

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