Bailey constructs buildings for customers which can take many years to complete. Bailey has three contracts in progress at 30 September 20×7, which are detailed below. All of the contracts below began in the current year.
Contract 1 Contract 2 Contract 3
RM ‘000 RM ‘000 RM ‘000
Price 10,000 8,000 4,000
Costs incurred to date -6,000 -4,000 -500
Costs to complete -1,000 -6,000 -2,000
Progress 80% 60% 25%
Amount billed to date 7,000 3,000 1,000
What cost of sales should be recorded (to the nearest thousand) in relation to contract 2?
A $4,200,000
B $9,400,000
C $5,640,000
D $6,800,000
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REVENUE KAPLAN question 292
5y ago#1Hi,
Have you tried to solve it yourself? I'll happily help by explaining where you have gone wrong but firstly you need to have given it a go yourself.
Let me know how you get on and I'll then help.
Thanks
Bairly should recognize revenue of 11 620 000
3y ago#3But that isn't answering the question where it is asking for the cots of sales.
hi
can you let me know ,how's the 125 ,000 contract liability is being recorded in Statement of financial position in relation to contract 3
3y ago#5The contract asset/liability is calculated as the revenue recognised to date less the amounts invoiced to date. Give it a go and see how you get on.
Thanks
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