A construction contractor has entered into a fixed-price contract of 18,000 lacs to construct a bridge within a three-year time frame. The contract…

A construction contractor has entered into a fixed-price contract of 18,000 lacs to construct a bridge within a three-year time frame. The contract specifies the total contract price and includes provisions for variations in work, which may affect revenue and costs during the contract period. The contractor maintains detailed records of costs incurred and estimates of profit to be recognized each year. A summary of the financial data for the contract is as follows (amounts in lacs): (Amount in lacs) Year 1 Year 2 Year 3 Initial Amount for revenue agreed in contract 18,000 18,000 18,000 Variation in Revenue (+) 400 400 Contracts costs incurred up to the reporting date 4,186 12,336* 16,200** Estimated profit for whole contract 1,900 2,000 2,000 *includes 200 lacs for standard materials stored at the site to be used in year 3 to complete the work. **Excludes 200 lacs for standard material brought forward from year 2. The variation in cost and revenue in year 2 has been approved by customer. Using the provisions of Accounting Standard (AS) 7 Construction Contracts (Revised), compute the following year-wise: 1. Revenue to be recognized in the Statement of Profit and Loss. 2. Expenses to be recognized in the Statement of Profit and Loss. 3. Contract costs to complete the remaining work. 4. Profit or loss to be recognized each year.