AC2101 S1 2014 Seminar 18 Revenue.pptx

Je5 upon completion of project dr progress billings

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Unformatted text preview: à༎ Net Loss Illustration 1 – Project B §༊  Contract price = $6m; to be completed in 4 yrs §༊  At end of Year 20x3 Ø།  % completed to- date (cost- to- cost basis) = $4620k / $6,600k = 70% v༇  Total estimated profit (loss) on entire project = 100% * ($6m – ($6.6m)) = - $0.6m v༇  Cumulative revenue recognised to date= 70% x $6m = $4.2m v༇  Cumulative costs recognised to date= 70% x $6.6m = $4.62m v༇  Cumulative losses to date = $4.2m - $4.62m = - $0.42m v༇  Provision for future losses = 334 x - $0.6m = - $0.18m 0% $(0.6M) 17 Do JE4 for 20x3 •  JE4: Recognition of revenue & costs at end of period In P/L Dr Construction costs $2,050k In SFP Cr Construction- in- progress(CIP) ($850k) Cr Construction revenue ($1,200k) In P/L 35 Profit and Loss Account for 20x3 Construction revenue $1,200 Less Construction costs $2,050 Profit (Loss) ($ 850) 36 18 Statement of Financial Position as at 31 Dec 20x3 Construction- in- progress Costs incurred to date $4,620 Add/(less) attributable profit/(loss)($ 600)* $4,020 Less Progress billings to date $4,500 Under (over) billings ($ 480) *$180 + $70 - $850 37 Scenario 2: Current estimates à༎ Net Loss Illustration 1 – Project B §...
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This document was uploaded on 02/10/2014.

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