Reference no: EM132748616
Question - JUBAIL BUILDERS is constructing a multi-unit residential complex. In the prior year, JUBAIL BUILDERS entered into a contract with a customer for a specific unit that is under construction. JUBAIL has determined that the contract is a single performance obligation satisfied over time. JUBAIL BUILDERS gathered the following information for the contract during the year.
JUBAIL BUILDERS-Year Ended December 31, 2018:
Costs to date 10,500,000
Future expected costs 7,000,000
Work certified to date 12,600,000
Expected Sales value 22,400,000
Revenue taken in earlier period 8,400,000
Costs taken in earlier periods 6,650,000
Required -
1. Calculate the amounts to be included in the statement of profit or loss in respect of revenue and costs for the year ended December 31, 2018 on both methods (I) Input Method (cost basis), and (II) Output Method (Sales Basis).
2. Calculate the total expected profit for the year 2018?
3. What is the percentage of completion? Note: Under the input method?
4. What amount of gross profit should be shown in the statement of profit for the year using the output method (sales basis)?
5. What amount of gross profit should be shown in the statement of profit for the year using the input method (costs- basis)?