Question
Please answer all 3 questions and explain. Thank you in advance ZZZ Corp. has a contract to construct a $5,000,000 cruise ship at an estimated
Please answer all 3 questions and explain. Thank you in advance
ZZZ Corp. has a contract to construct a $5,000,000 cruise ship at an estimated total cost of $4,000,000. The company will begin the construction in 2011 and expects to complete it in 2014. ZZZ Corp. has never constructed a cruise ship before and the customer has never operated a cruise ship, so there are inherent future risks in this construction. The company has the following activity in 2011:
Costs to date:$980,000
Estimated costs to complete:3,020,000
Progress billings during the year:1,000,000
Cash collected during the year:648,000
- Under IFRS, how much revenue should Swallow Corp. recognize on its 2011 income statement?
- Under IFRS, howmuch of construction in progress is reported on its 2011 balance sheet?
- Under IFRS, how much of accounts receivable is reported on its 2011 balance sheet?
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