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June 2010 Dune Q2 point vi the construction contract part
When I include cost of construction contract into cost of sale, instead of 40,000×30%-2,400=9,600 why I cant calculate as below
cost to date 8,000
plant depr 3,000
Total to COS 11,000I cant think out where I am wrong 🙁
Another qn, for finance cost, why div paid 10,000 cant be included?
revenue and costs of a construction contract should be recognised according to the stage of completion of the contract……..IAS 11
% of completion given in the qn – 30%.
Total revenue = 40,000 (given)
Total costs = 32,000 (see below)in the IS
revenue = 30% * 40,000 = 12,000
cost of sale = 30% * 32,000 = 9,600total costs
costs to date = 8,000(given) + plant depn (12,000 – 3,000)*(6/18)
=11,000
further costs to complete =15,000(given) + plant depn (12,000 – 3,000)*(12/18)
=21,000
total costs = 11,000 + 21,000 = 32,000For the joint stock company, paying dividends is not an expense; rather, it is the division of after tax profits among shareholders….(from Wikipedia)
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