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    Answer For Revenue Tutorial

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    LYDIA KONG WEI JIE

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    © All Rights Reserved
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    Answer For Revenue Tutorial

    Uploaded by

    LYDIA KONG WEI JIE
    4 views10 pages

    Original Title

    Answer for Revenue Tutorial

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    © © All Rights Reserved

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    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    4 views10 pages

    Answer For Revenue Tutorial

    Uploaded by

    LYDIA KONG WEI JIE

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    of 10

    Tutorial 13

    Question 1:Solution:
    (a)
    The percentage of completion

    Agreed value of work completed


    = ---------------------------------------------- x 100%
    Total contract revenue

    67,500
    =-------------------------- x 100%
    150,000

    = 45%
    (b)
    Working:
    Estimated profit RM’000
    Total contract price (Revenue) 150,000
    Less estimated total cost (63,000+70,000) (133,000)
    Estimated profit 17,000
    (b)
    Rose Enterprise Bhd.
    Statement of profit or loss for the year ended 31 December x1
    RM'000
    Revenue (RM150mil x 45%) 67,500
    Costs (RM133mil x 45%) (59,850)
    Profit 7,650
    Rose Enterprise Bhd.
    Statement of financial position (extract) as at 31 December x1
    RM'000
    Current asset
    Contract asset (Note 1) 9,900
    Trade receivables (60,750-60,000) 750
    Amount invoiced Amount received
    Note 1
    Costs incurred to date 63,000
    Profit recognised 7,650
    70,650
    Amount invoiced (60,750)
    Contract asset 9,900
    22 C Co

    Maryhill bypass
    1. Estimated profit RM’000
    Total contract price 9,000
    Less estimated total cost (1,400+5,600) (7,000)
    Estimated profit 2,000

    2. Percentage complete

    Value of work completed/total contract price x 100%


    = (2,800/9,000) x 100%
    = 31.11%
    Rottenrow Centre
    1. Estimated loss RM’000
    Total contract price 8,000
    Less estimated total cost (2,900+5,200) (8,100)
    Estimated loss (100)

    2. Percentage complete

    Value of work completed/total contract price x 100%


    = (3,000/8,000) x 100%
    = 37.5%
    C Co
    Statement of profit or loss Maryhill bypass Rottenrow
    Centre
    RM’000 RM’000
    Revenue (31.11% x9,000)/(37.5% x8,000) 2,800 3,000
    Cost of sales:
    Contract expenses (2,178) (3,038)
    (31.11% x 7,000)/(37.5% x8,100)
    Expected loss _____ (62)
    Profit/(loss) 622 (100)
    C Co
    Statement of financial position
    Maryhill bypass Rottenrow
    Centre
    Current assets RM’000 RM’000

    Current liabilities
    Contract liability 578 600

    Note
    Costs incurred to date 1,400 2,900
    Recognised profit/(loss) 622 (100)
    2,022 2,800
    Amount invoiced (2,600) (3,400)
    (578) (600)
    Question 3
    (a)
    According to IAS 24 Related Party Disclosure, a
    customer with whom an entity transacts a significant
    volume of business is not a related party. Therefore
    XC is not a related party of CT and the negotiated
    discount does not need to be disclosed.

    9
    (b)
    A person is related to an entity if that person has
    significant influence over the entity. A person is related
    to an entity if that person is a member of key
    management personnel of the entity.

    Therefore, George is a related party of CT as he owns


    40% of CT’s equity shares and is able to exert
    significant influence over CT. Furthermore, he is CT’s
    president and is a member of the key management
    personnel of CT.

    The sale of the property for $500,000 will need to be


    disclosed, along with its valuation as a related party
    transaction. 10

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