4. VILLAR Construction entered into a fixed price contract with CITI LIFE on July 1, 2017 to construct a medium rise condominium. At that time VILLAR estimated that it would take between two to three years to complete the project. The total contract price for constructing the building is P 4,500,000. VILLAR accounts this contract under the percentage of completion method. The building was deemed completed on December 31, 2018. Estimated percentage of completion, accumulated contract costs incurred, estimated costs to complete the contract and accumulated building under the contract were as follows: At Dec 31, 19 At Dec 31, 18 60% At Dec 31, 17 30% P1,140,000 2,660,000 1,600,000 100% Percentage of Completion Contract costs incurred Estimated Costs of Complete Progress Billings P2, 820,000 1,880,000 2,700,000 P4, 800,000 4,500,000 The amount of gross profit to appear on the income statement for the period ended 2019 is:
4. VILLAR Construction entered into a fixed price contract with CITI LIFE on July 1, 2017 to construct a medium rise condominium. At that time VILLAR estimated that it would take between two to three years to complete the project. The total contract price for constructing the building is P 4,500,000. VILLAR accounts this contract under the percentage of completion method. The building was deemed completed on December 31, 2018. Estimated percentage of completion, accumulated contract costs incurred, estimated costs to complete the contract and accumulated building under the contract were as follows: At Dec 31, 19 At Dec 31, 18 60% At Dec 31, 17 30% P1,140,000 2,660,000 1,600,000 100% Percentage of Completion Contract costs incurred Estimated Costs of Complete Progress Billings P2, 820,000 1,880,000 2,700,000 P4, 800,000 4,500,000 The amount of gross profit to appear on the income statement for the period ended 2019 is:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
The amount of gross profit to appear on the income statement for the period ended 2019 is:
a. (330,000)
b. (441,000)
c. (2,920,000)
d. (100,000)
Please refer to the picture below to answer the question.
![4. VILLAR Construction entered into a fixed price contract with CITI LIFE on July 1,
2017 to construct a medium rise condominium. At that time VILLAR estimated
that it would take between two to three years to complete the project. The total
contract price for constructing the building is P 4,500,000. VILLAR accounts this
contract under the percentage of completion method. The building was deemed
completed on December 31, 2018. Estimated percentage of completion,
accumulated contract costs incurred, estimated costs to complete the contract
and accumulated building under the contract were as follows:
At Dec 31, 18
At Dec 31, 19
Percentage of Completion
Contract costs incurred
Estimated Costs of Complete
Progress Billings
At Dec 31, 17
30%
P1,140,000
2,660,000
1,600,000
60%
100%
P4, 800,000
P2, 820,000
1,880,000
2,700,000
500,000
The amount of gross profit to appear on the income statement for the period ended
2019 is:
A. P(330,000) B.(441,000) C. (2,920,000)
D. (100,000)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F924f6e85-f7f7-4042-bb27-e5a5b7b59f4a%2F3e1866d8-0794-4916-ae5e-ee7e83201e56%2Fooemobp_processed.jpeg&w=3840&q=75)
Transcribed Image Text:4. VILLAR Construction entered into a fixed price contract with CITI LIFE on July 1,
2017 to construct a medium rise condominium. At that time VILLAR estimated
that it would take between two to three years to complete the project. The total
contract price for constructing the building is P 4,500,000. VILLAR accounts this
contract under the percentage of completion method. The building was deemed
completed on December 31, 2018. Estimated percentage of completion,
accumulated contract costs incurred, estimated costs to complete the contract
and accumulated building under the contract were as follows:
At Dec 31, 18
At Dec 31, 19
Percentage of Completion
Contract costs incurred
Estimated Costs of Complete
Progress Billings
At Dec 31, 17
30%
P1,140,000
2,660,000
1,600,000
60%
100%
P4, 800,000
P2, 820,000
1,880,000
2,700,000
500,000
The amount of gross profit to appear on the income statement for the period ended
2019 is:
A. P(330,000) B.(441,000) C. (2,920,000)
D. (100,000)
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