• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
OpenTuition | ACCA | CIMA

OpenTuition | ACCA | CIMA

Free ACCA and CIMA on line courses | Free ACCA, CIMA, FIA Notes, Lectures, Tests and Forums

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Forums
  • Search
  • Register
  • Login
  • Latest
  • ACCA
  • Ask ACCA Tutor
  • OBU
  • CIMA
  • Ask CIMA Tutor
  • FIA
  • Buy/Sell
  • Qualified
  • Forum Rules

ACCA December 2020 Pass rates are now available >>

revenue

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › revenue

  • This topic has 1 reply, 2 voices, and was last updated 1 month ago by P2-D2.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • November 26, 2020 at 11:05 pm #596595
    pateladam
    • Topics: 13
    • Replies: 9
    • ☆

    On 1 oct 2018 pricewell entered into a contract to construct a bridge over a river. the performance obligation will be satisfied over time. the agreed price of the bridge is 50m and construction was expected to be completed on 30sep 2010.
    The 14.3m in the TB consists of:
    Materials, labour and overheads 12000
    specialist plant acquired 1 oct 2008 8000
    Payment from customer -5700

    The sales value of the work done at 31 march 2019 has been agreed at 22ma and the estimated cost to complete ( excl plant depcn ) is 10m, the specialist plant will have no residual value at the end of the contract and should be depreciated on a monthly basis, pricewell recognises progress towards satisfaction of the performance obligation on the outputs basis as determined by the agreed work to date compared to the total contract price.

    Pricewells revenue includes 8m for goods it sold as an agent for trbily, pricewell earned commission of 20% on these sales and remitted the difference of 6.4m ( included in COS) to tribly.

    the Answer they have is

    Revenue: 15600
    COS:6800
    Contract asset: 17100 ( Cost to date 12000+2000, profit to date 8800, payment from customer ( 5700)

    Hi SIR, Sorry for the long paragraph, plz could you explain why depcn is added to the contract asset also why it would not be as a minus in COS, also in terms of revenue why 6.4m is deduced and not 8m with the difference of 1.6m in interest income as it is commission recieved? Another thing is they have done 44% of the cost to work out amount in profit and loss would it not be 44% of the profit to date and revenue with cost being the balancing figure?

    Sorry for the long question sir but really struggling to get my head round why they have worked it in this way?

    November 28, 2020 at 8:01 am #596804
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 4882
    • ☆☆☆☆☆

    Hi,

    As we have the depreciation adjustment then we cannot use the normal methodology of including the cost as a balancing figure. We’d need to look at 44% of the costs to match up to the revenue and then adjust for the depreciation figure.

    Thanks

  • 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 Exam Results – Comments

ACCA PM December 2020 Exam Results ACCA TX December 2020 Exam Results ACCA AA December 2020 Exam Results ACCA FR December 2020 Exam Results ACCA FM December 2020 Exam Results ACCA SBL December 2020 Exam Results ACCA SBR December 2020 Exam Results ACCA AAA December 2020 Exam Results ACCA AFM December 2020 Exam Results ACCA APM December 2020 Exam Results ACCA ATX December 2020 Exam Results

Donate

If you have benefited from our materials please donate

Donate now

You can also "donate your time" and help out other students on the Students Forums

Specially for OpenTuition students

20% off ACCA Books

Get BPP Discount Code

Latest comments

  • Kim Smith on AA Chapter 18 Questions
  • AManullah29 on AA Chapter 18 Questions
  • Ken Garrett on CIMA P3 Chapter 3 Test
  • Ken Garrett on CIMA BA4 Contract law
  • Ken Garrett on ACCA AB Chapter 1 – The nature and structure of organisations – Questions

Copyright © 2021 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in


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