Bohr Co is a construction company and has entered into a contract with a fixed price of 600,000 during the year ended 30^thNovember 20X8. Bohr Co measures percentage completion using the work certified as a proportion of contract value.

The following information relates to the contract:

Costs incurred to date	360,000
Estimate of the costs to complete the contract	125,000
Value of work certified by independent architect	450,000
Amounts invoiced to client	250,000

Requirement

1. Prepare the relevant Statement of profit or loss and Statement of financial position extracts in respect of the above contract for the year ended 30^thNovember 20X8.

2. Before the financial statements are finalised, technical problems on the contract mean that costs to complete are reassessed to 275,000. Prepare the amended Statement of profit or loss extract for the year ended 30^thNovember 20X8. A Statement of financial position is notrequired.

3. Explain the different approaches in a) and b).