a QUETHON Ires is.13 Coesider de fillowing indopendmt cases ef variost ebopuries in the constoction indityy Case A cons wire incurred durks the propoal and coernat nepoistines, and lactude be initia! bridge decige Revenue from contracts with cuatemen Required Biriefly divens bow Zonfi tid thould woeure for the conth inestad. Cun B ethen, the sellosing coics were iscunne. Required Case C 106 per wek for nery wek beyeed the agropd ipen completina date. Moobe Lat copchided that be expected valae mebod is mot pendietive in estimieies the Requirat meturiag reverse. Consider the following independent cases of various companies in the construction industry: Case A Zondi Ltd incurred R200 000 of costs in connection with winning a successful bid on a contract to build a new bridge over the Khamanzi River near Greytown in KZN, following the recent drowning of two school children that had to cross the river to get to school. The costs were incurred during the proposal and contract negotiations, and include the initial bridge design. Required Briefly discuss how Zondi Ltd should account for the costs incurred. Case B Gumede Ltd entered into a contract with a customer to build an office building. Amongst others, the following costs were incurred: TransportheavyequipmenttothebuildingsiteDirectcostsrelatedtosupplies,equipment,materialandlabour(buildingphase)CostsrelatedtoabnormalwastageofmaterialsRand6500050000040000 Gumede Ltd expects to recover all incurred costs under the contract. Required Briefly discuss how Gumede Ltd should account for the costs incurred. Case C Mbobo Ltd entered into a contract to a build a dam for the South African government. The total contract price is R 100 million, with a performance bonus of R40 million that will be paid based on the timing of completion. The amount of the performance bonus decreases by 10% per week for every week beyond the agreed-upon completion date. Mbobo Ltd concluded that the expected value method is most predictive in estimating the amount of variable consideration that the company is expected to be entitled to. Management estimates that there is a 60% probability that the contract will be completed by the agreed-upon completion date, a 30% probability that it will be completed one week late, and a 10% probability that it will be completed two weeks late. Required Briefly discuss how Mbobo Ltd should determine the transaction price for purposes of measuring revenue. QUESTION IFRS 15.13 Consider the following independent cases of various companies in the consuroction induatry: Case A Zondi L.td incurred R200 000 of costs in consection with winning a succesuful bid en a contract to build a new bridge over the Khamanai River aear Greytown in KZN, following the rocent drowning of two sehool children that had to cross the river so get to sehool. The costs were incurred during the proposal and eontract negotiations, and include the initial bridge design. Required Briefly discuss how Zondi Lad should account for the conts incurred. Case B Gumede Lod entered into a contract with a customer to build an office belding. Amengat others, the following costs were incurred: Gumede L.te expects to recover all incurrod costs under the coetract. Required Briefly discuss how Gumede Lod should acoount for the costs ineurred. Case C Mbobo Lid entered into a contract to a build a dam for the Soeth African povemment. The total contract price is R.100 million, with a performance boess of R 40 million that will be paid based on the timing of completion. The amount of the performance boess decreases by 10% per week for every week beyond the agreed-upoe completion duse. Mbobo Ltd concluded that the expected value method is most predictive in estimuting the amount of variable consideration that the company is expected to be cntitled to. Management estimates that there is a 60% probability that the contract will be completed by the agreed-upon completion date, a 30% probability that it will be completed coe week late, and a 10% probability that it will be completed rwo weeks late