Kariba BSC Construction Company Kariba BSC is a construction company. It started work on two construction projects during the year ended 31 December 2020. The nature of both contracts is that the customer controls the asset as the project goes forward. Work is certified by a surveyor as performance obligations are completed. The following figures relate to those projects at the end of the reporting period. Contract Price Costs incurred to date Estimated costs to completion Value of work certified to date Progress billing Kwacha Flyover BD'000 13,500 2,100 8,400 4,200 3,900 Ngwee Mall BD'000 12,000 4,350 7,800 4,500 5,100 An old disused oil well has been discovered under the site for the Ngwee Mall and the costs of dealing with this have been taken into account in the calculation of estimated costs to completion. Kariba BSC's lawyers are reasonably confident that the customer will have to bear the additional costs which will be incurred in stabilising the land. If negotiations are successful, then the contract price will increase to BD15 million. Kariba BSC recognises revenues and profits on construction contracts on the basis of work certified to date. Required Calculate the figures which would appear in Kariba BSC's financial statements in respect of these two projects. (2 Marks) Kariba BSC Construction Company Kariba BSC is a construction company. It started work on two construction projects during the year ended 31 December 2020. The nature of both contracts is that the customer controls the asset as the project goes forward. Work is certified by a surveyor as performance obligations are completed. The following figures relate to those projects at the end of the reporting period. Contract Price Costs incurred to date Estimated costs to completion Value of work certified to date Progress billing Kwacha Flyover BD'000 13,500 2,100 8,400 4,200 3,900 Ngwee Mall BD'000 12,000 4,350 7,800 4,500 5,100 An old disused oil well has been discovered under the site for the Ngwee Mall and the costs of dealing with this have been taken into account in the calculation of estimated costs to completion. Kariba BSC's lawyers are reasonably confident that the customer will have to bear the additional costs which will be incurred in stabilising the land. If negotiations are successful, then the contract price will increase to BD15 million. Kariba BSC recognises revenues and profits on construction contracts on the basis of work certified to date. Required Calculate the figures which would appear in Kariba BSC's financial statements in respect of these two projects. (2 Marks)
