- This topic has 1 reply, 2 voices, and was last updated 10 years ago by
.
- Posts
Hello…
I’m having a bit of problem with Dec 2012 #4 (b).This is what I did.
Expected profit= $50 ($250-$200)
Stage of completion based on the sales basis= 64% (160/250*100)
SOPOL figures:
Revenue $160 (64%* $250)
COS ($128) (64% * 200)
Profit $32SOFP figures:
Gross amounts due “to”/”from” customers is based on whether we have a Dr or Cr balance on the Contract a/c.Contract a/c
Costs incurred 145 DR
Revenue 160 DR
Progress billings 160 CR
COS 128 CR
Balance 17 DR
Therefore under current assets we will have gross amounts due “from” customers under construction contracts.Receivables a/c
Progress billings 160 DR
Cash received 150 CR
Balance 10 DRBased on the examiners answers I got the figures for the SOFP correct.
But I did not get the SOPOL figures right.
Instead I noticed he only showed what I think is the difference for the particular figure between both the cost and sales basis method.Can you explain why he did that? Or Where did I go wrong?
Thanks!
Are you sure? Because 32 profit from working 1 fits correctly into working 2 to give a balance due from customers of 17 and you say that the examiner also has 17 due from customers (+10 receivable)
Without the question in front of me (away from home with only an iPad) I suppose it could be that the question says maybe something like the contract has been accounted for on a cost basis but should have been accounted for on a sales basis
If that doesn’t answer it, post again. I’m home late on Saturday so could maybe get to your post (if there is another post) hopefully on Sunday or Monday
- You must be logged in to reply to this topic.