Question: Assume that an architect hired by the company made the following estimates of the project’s percentage of completion at 50%, 90% and 100% at the end of 2020,2021, and 2022, respectively, what is the realized gross profit for 2021, using percentage of completion method – output measures as determined by estimates made by the architect? 2. On January 1, 2020, an entity entered into a long-term construction contract with fixed contractprice of P5,000,000. The entity billed its client as follows: 30% during 2020, 40% during 2021 andthe remainder at the year of project completion. The following data were provided by the costaccountant of the entity:202020212022Cumulative Cost incurred as of the end of the yearP2,200,000P3,600,000P4,800,000Estimated remaining cost to complete at the end of theP3,300,000P900,000year

Using percentage method of completion, the gross profits is realized on the basis of percentage of…

Answered: 2. On January 1, 2020, an entity…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Question: Assume that an architect hired by the company made the following estimates of the project’s percentage of completion at 50%, 90% and 100% at the end of 2020,2021, and 2022, respectively, what is the realized gross profit for 2021, using percentage of completion method – output measures as determined by estimates made by the architect?

2. On January 1, 2020, an entity entered into a long-term construction contract with fixed contract
price of P5,000,000. The entity billed its client as follows: 30% during 2020, 40% during 2021 and
the remainder at the year of project completion. The following data were provided by the cost
accountant of the entity:
2020
2021
2022
Cumulative Cost incurred as of the end of the year
P2,200,000
P3,600,000
P4,800,000
Estimated remaining cost to complete at the end of the
P3,300,000
P900,000
year

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