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Point 1: Towed Ltd entered into a contract on 3 March 2018 to build a metro station for a contract price of £5,800,000. At 30 November2018, the certified completion was 30% with costs incurred to date of £1,950,000. Costs to complete were estimated to be £2,850,000.
Point 2: At November 2019, the certified completion was 70% with costs incurred to date of £3,700,000. Costs to complete were estimated to be £1,250,000.
Question 1: What amount will be recognised as contract revenue in Towed Ltd.'s statement of profit and loss for the year end 30 November 2019.
Option 1: £595,000
Option 2: £2,025,000
Option 3: £2,320,000
Option 4: £4,060,000
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