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Plz answer the question a, b, c Part A As at 1 January 2022, HK Wave Limited started a long-term contract to construct a warehouse
Plz answer the question a, b, c
Part A As at 1 January 2022, HK Wave Limited started a long-term contract to construct a warehouse with a contract price of $1,500,000. The construction project will be completed on 31 December 2024. Costs for the three years are shown as below: 2022 $200,000 800,000 Actual costs to date Estimated costs to complete the project 2023 $600,000 600,000 2024 $1,100,000 -0- The Company's financial year-end is 31 December. Required: (Round the percentage of completion, if any, to 2 decimal places and round the answers to the nearest dollar.) (a) Using the percentage-of-complet method, compute the estimated gross profit that would be recognized during each year of the construction period. (6 marks) (b) Using the cost-recovery method, compute the estimated gross profit that would be recognized during each year of the construction period. (3 marks) (c) Assume the estimated costs to complete the project (in 2023) changed from $600,000 to $811,765, what will be the estimated gross profit /loss that would be recognized during each year (using the percentage-of-completion method)? (8 marks)Step by Step Solution
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