Entity A is a construction company, recognising progress based on work certified over total contract value. Entity A will satisfy the performance obligation over time. The following information relates to one of its long-term contracts as at 31 May 2019, Entity As year-end.

• Contract price $200,000
• Costs incurred to date $130,000
• Estimated cost to complete $20,000
• Invoiced to customer $120,000
• Work certified to date $180,000

In the year to 31 May 2018, Entity A had recognised revenue of $60,000 and a profit of $15,000 in respect of this contract.

REQUIRED:

What profit should appear in Entity As Statement of Profit or Loss as for the period ended 31 May 2019 in respect of this contract?

ANSWER:

Contract profit = Blank 1