2. During 20x1, Cord Builders, Inc. started work on a P9,000.000 fixed-price construction contract. Cord appropriately uses the percentage-of-completion method in accounting for the contract. Cord's accounting records disclosed the following: 20x2 20x1 Cumulative contract costs incurred 3,900,000 6,300,000 Estimated total costs at completion 7,800,000 8,100,000 How much are the revenue and cost of construction recognized in 20x2, respectively? a. 2,220,000; 2,150,000 b. 2,520,000; 2,400,000 c. 2,520,000; 2,420,000 d. 2,500,000; 2,400,000 (AICPA-Adapted)
2. During 20x1, Cord Builders, Inc. started work on a P9,000.000 fixed-price construction contract. Cord appropriately uses the percentage-of-completion method in accounting for the contract. Cord's accounting records disclosed the following: 20x2 20x1 Cumulative contract costs incurred 3,900,000 6,300,000 Estimated total costs at completion 7,800,000 8,100,000 How much are the revenue and cost of construction recognized in 20x2, respectively? a. 2,220,000; 2,150,000 b. 2,520,000; 2,400,000 c. 2,520,000; 2,420,000 d. 2,500,000; 2,400,000 (AICPA-Adapted)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Letter C is the correct answer, please provide complete solution.
Transcribed Image Text:During 20x1, Cord Builders, Inc. started work on a P9,000,000
fixed-price construction contract. Cord appropriately uses the
percentage-of-completion method in accounting for the
contract. Cord's accounting records disclosed the following:
20x2
2.
20x1
Cumulative contract costs incurred
3,900,000
6,300,000
Estimated total costs at completion
7,800,000
8,100,000
How much are the revenue and cost of construction recognized in
20x2, respectively?
a. 2,220,000; 2,150,000
b. 2,520,000; 2,400,000
c. 2,520,000; 2,420,000
d. 2,500,000; 2,400,000
(AICPA-Adapted)
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