solution
solution.
Dhaka Developers is a newly established real estate developer. In their first year of operation, they have
signed a contract to build a residential complex for a client in 5 years. Total value of the contract is BDT
50 crore. Costs incurred for developingthe residential complex is detailed in the table below:
Year Costs Incurred in Each Year
Year 1 BDT 10 crore
Year 2 BDT 5 crore
Year 3 BDT 15 crore
Year 4 BDT 5 crore
Year 5 BDT 1 crore
Assume they do not have any other contract in hand for the first 5 years of operation. Thus, all the
expenses incurred by the business in the first five years are incurred for developing this residential
complex only. Calculate the amount of net income they can report in their income statement at the
end of Year 1 and Year 2. [Read the question carefully. You only have to show the calculation for Year 1
and Year 2, not all 5 years.]
signed a contract to build a residential complex for a client in 5 years. Total value of the contract is BDT
50 crore. Costs incurred for developingthe residential complex is detailed in the table below:
Year Costs Incurred in Each Year
Year 1 BDT 10 crore
Year 2 BDT 5 crore
Year 3 BDT 15 crore
Year 4 BDT 5 crore
Year 5 BDT 1 crore
Assume they do not have any other contract in hand for the first 5 years of operation. Thus, all the
expenses incurred by the business in the first five years are incurred for developing this residential
complex only. Calculate the amount of net income they can report in their income statement at the
end of Year 1 and Year 2. [Read the question carefully. You only have to show the calculation for Year 1
and Year 2, not all 5 years.]
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