• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • CIMA Forums
  • Ask CIMA Tutor
  • FIA
  • OBU
  • Buy/Sell Books
  • All Forums
  • Latest Topics

ACCA December 2022 Exam results:
* Pass rates * Comments * Instant Poll * Competition *

Specially for OpenTuition students: 20% off BPP Books for ACCA & CIMA exams – Get your BPP Discount Code >>

Pricewell – June 2009

Forums › ACCA Forums › ACCA FR Financial Reporting Forums › Pricewell – June 2009

  • This topic has 1 reply, 2 voices, and was last updated 4 years ago by Kim Smith.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • May 17, 2018 at 6:28 pm #452089
    chrisi04
    Member
    • Topics: 49
    • Replies: 23
    • ☆☆

    Hi,

    Scenario:
    On 1 October 2008 Pricewell entered into a contract to construct a bridge over a river. The agreed price of the bridge is $50 million and construction was expected to be completed on 30 September 2010. The $14.3 million in the trial balance is:
    $’000
    materials, labour and overheads 12,000
    specialist plant (acquired 1 October 2008) 8,000
    payment from customer (5,700)

    The sales value of the work done at 31 March 2009 has been agreed at $22 million and the estimated cost to complete (excluding plant depreciation) is $10 million. The specialist plant will have no residual value at the end of the contract and should be depreciated on a monthly basis. Pricewell recognises profits on uncompleted contracts on the percentage of completion basis as determined by the agreed work to date compared to the total contract price.

    I cannot understand the reasoning behind the depreciation for the acquired plant is worked out.
    I only understood that we need to depreciate for 6 months (from 1 Oct 2008 till 31 March 2009). I cannot understand why there is 1/2.

    Answer:
    Depreciation:
    $8,000 x 1/2 x 6/12 = $2,000

    Many thanks,

    Chri

    May 18, 2018 at 8:10 am #452647
    Kim Smith
    Keymaster
    • Topics: 100
    • Replies: 6784
    • ☆☆☆☆☆

    Hi Chris you appear to be looking at an original past exam question which has not been updated to take account of the change in exam format (Qs in Section C will be only 15 marks, not 25 marks) or, more importantly, technical changes in IFRS. I suggest you disregard it as accounting for construction contracts will be examined under IFRS 15 (not IAS 11) and also in this Q, the lease would be accounted for under IFRS 16 (not IAS 17).

  • Author
    Posts
Viewing 2 posts - 1 through 2 (of 2 total)
  • You must be logged in to reply to this topic.
Log In

Primary Sidebar

ACCA News:

 

ACCA My Exam Performance for non-variant Applied Skills exams is available NOW

NEW! Download the ACCA Pass Guide

FREE Verifiable CPD for ACCA Members

ACCA mock exams and debrief videos

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

Donate

If you have benefited from OpenTuition please donate.

ACCA CBE 2023 Exams

Instant Poll * How was your exam, and what was the result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

Specially for OpenTuition students

20% off BPP Books

Get BPP Discount Code

Latest comments

  • AkilaShaikh on Capital asset pricing model (part b) – ACCA Financial Management (FM)
  • AkilaShaikh on Capital asset pricing model (part b) – ACCA Financial Management (FM)
  • hamza5168180 on Revenue – allocation – ACCA Financial Reporting (FR)
  • John Moffat on MA Chapter 4 Questions Cost Classification and Behaviour
  • John Moffat on Capital asset pricing model (part b) – ACCA Financial Management (FM)

Copyright © 2023 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in


We use cookies to show you relevant advertising, find out more: Privacy Policy · Cookie Policy