?calculate the profit for the years ended

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Reference no: EM132596501

The following items were extracted from the accounting records of Stamp Ltd and relate to a contract started on 1 May 2017 and completed 30 April 2020.

Original contract price: R500 000

On 1 May 2018, the original contract price was adjusted to make provision for extras to the amount of: R80 000.

Costs to date:

30 April 2018 - R118 000

30 April 2019 - R390 000

30 April 2020 - R495 000

Estimated additional costs which have to be incurred to complete the contract:

30 April 2018 - R350 000

30 April 2019 - R100 000

Value of work certified:

30 April 2018 - R95 000

30 April 2019 - R395 000

30 April 2020 - R580 000

Question 1: Calculate the total estimated profit (loss) on the contract for the years ended 30 April 2018 to 30 April 2020.

Question 2: Calculate the profit (loss) for the years ended 30 April 2018 to 30 April 2020 which must be transferred to the income statement (Statement of profit or loss and other comprehensive income) each year if the percentage of completion method is used and the percentage is applied as the proportion of costs to date to the estimated total costs.

Reference no: EM132596501

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