Kazar Ltd is a construction company that prepares its financial statements to 31 March each year. During the year ended 31 March 2021 the compan

Kazar Ltd is a construction company that prepares its financial statements to 31 March each year. During the year ended 31 March 2021 the company commenced three construction contracts that are expected to take more than one year to complete. The position of each contract at 31 March 2021 is as follows:

CONTRACTS

Agreed Contract Price Cost incurred to date (at 31 March 2021) Cost to completion Agreed value of work completed at 31 March 2021 Progress billings invoiced at 31 March 2021 Cash received

Negril $000

11,000 3,800 5,600 2,200

0 0

Ocho Rios Portland $000 $000

2,400 7,200 1440 5400 360 2400 1680 2,500 1720 1,200 1200 960

The agreed value of the work completed at 31 March 2021 is considered to be equal to the revenue earned in the year ended 31 March 2021. The percentage of completion is calculated as the agreed value of work completed to the agreed contract price.

A fault was discovered with the Ocho Rios contract and cost of rectification is $500,000. This has not been included in the cost to date above. The fault is due to poor construction and will be absorbed by Kazak Limited.

The company considers that the outcome of a contract cannot be estimated reliably until a contract is 30% complete. It is, however, probable that the customer will pay for costs incurred so far.

y commenced three construction contracts that are expected to take more than one year to complete. The position of each contract at 31 March 2021 is as follows: CONTRACTS Agreed Contract Price Cost incurred to date (at 31 March 2021) Cost to completion Agreed value of work completed at 31 March 2021 Progress billings invoiced at