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kaplan 110 queastion

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › kaplan 110 queastion

  • This topic has 1 reply, 2 voices, and was last updated 1 year ago by P2-D2.
Viewing 2 posts - 1 through 2 (of 2 total)
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  • May 16, 2024 at 12:28 pm #705513
    Talkativejerk
    Participant
    • Topics: 4
    • Replies: 1
    • ☆

    Malik is a construction business, recognising progress based on work certified as a proportion of total contract value. Malik will satisfy the performance obligation over time. The following information relates to one of its long-term contracts as at 31 May 20X4, Malik’s year-end. $

    Contract price 200,000

    Costs incurred to date 130,000

    Estimated cost to complete 20,000

    Invoiced to customer 120,000

    Work certified to date 180,000

    In the year to 31 May 20X3 Malik had recognised revenue of $60,000 and profit of $15,000 in respect of this contract. What profit should appear in Malik’s statement of profit or loss as at 31 May 20X4 in respect of this contract?

    my question is the answer they have deducted only 15000 from 45,000 the answer to be 30,000. why aren’t we deducting 60,000

    May 18, 2024 at 10:22 am #705607
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 7159
    • ☆☆☆☆☆

    Hi,

    Just be careful reading the information given in the question as you have correctly calculated the profit to date of 45,000. We need to remove the profit recognised to date which is given as 15,000 and not the 60,000 which is the revenue recognised to date.

    Thanks

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