Construction Contract Question Example To Compute The Percentage Of Completion and Disclosure/Presentation In the Income Statement And Balance Sheet.
| On 1 st January 2007, XYZ Construction Co Ltd has signed a fixed price contract of $ 42 million to build a bridge over a period of two years. At 31st December 2007, the following information are as follows:-
(a) Calculate the percentage of completion
(b) Amounts to be disclosed in the Income statement
(c) Amounts to be disclosed in the Balance sheet.
Cost to date
a. Percentage of completion
= Cost to date/ Total estimated cost(above) x 100%
= 21/35 x 100 = 60%
(b) Presentation in Income Statement
Income Statement for Year ended 31 st December 2007
© Presentation in Balance Sheet
Balance Sheet as at 31st December 2007