QUESTION 1

a. Define bill and hold sale and explain when revenue is recognized in this situation according to MFRS 118.

b. In 2016, STEPH Construction Company agreed to construct an apartment building at a price of RM2,200,000. The information relating to the costs and billings for this contract is shown below:

	2016 RM	2017 RM
Costs incurred to date	380,000	700,000
Estimated costs yet to be incurred	620,000	300,000
Customer billings to date	250,000	600,000
Collection of billings to date	220,000	420,000

REQUIRED:

Assuming that the percentage-of-completion method is used, compute the amount of gross profit to be recognized in 2016 and 2017 (showing the calculation is required).