Question
Entity A started a three-year contract to build a new office building on 1 April 2019. The contract had a fixed price of $90,000,000. The
Entity A started a three-year contract to build a new office building on 1 April 2019. The contract had a fixed price of $90,000,000. The entity will satisfy the performance obligation over time.
The entity incurred costs to 31 March 2020 of $77,000,000 and estimated that a further $33,000,000 would need to be spent to complete the contract.
The entity measures the progress of contracts using work completed compared to the contract price.
At 31 March 2020, a surveyor valued the work completed to date at $63,000,000.
REQUIRED:
Measure the contract revenue and the contract cost in the Statement of Profit or Loss for the year ended 31 March 2020 respectively.
ANSWER:
Contract revenue = $Blank 1
Contract cost = $Blank 2
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