57. Wynn, Inc. has a contract to construct a large hotel for P12,000,000. The contract was signed on January 2, 20x4 and it was expected that the hotel would be complete on December 31, 20x7. At the date the contract was signed, Wynn, Inc. anticipated the costs of construction would total P11,000,000. At the end of 20x5 the costs incurred were P3,490,000 and its estimate of total contract costs rose to P11,870,000. During 20x6, the company incurred costs of P4,020,000 and by the end of 20x6 the total cost estimate rose to P12,400,000. Due to certain circumstances, Wynn, Inc. believes there are inherent hazards in the contract beyond the normal, recurring business risks. Wynn, Inc. expects to recover all its costs under the contract. Under these conditions, what amount of revenue should Wynn, Inc. recognize in each of the following years? 20x5 P3,490,000 b. 20x6 P4,020,000 P400,000 20x5 P3,528,222 P8,380,000 20x6 P3,890,323 P4,890,000 a. С. P-0- d.
57. Wynn, Inc. has a contract to construct a large hotel for P12,000,000. The contract was signed on January 2, 20x4 and it was expected that the hotel would be complete on December 31, 20x7. At the date the contract was signed, Wynn, Inc. anticipated the costs of construction would total P11,000,000. At the end of 20x5 the costs incurred were P3,490,000 and its estimate of total contract costs rose to P11,870,000. During 20x6, the company incurred costs of P4,020,000 and by the end of 20x6 the total cost estimate rose to P12,400,000. Due to certain circumstances, Wynn, Inc. believes there are inherent hazards in the contract beyond the normal, recurring business risks. Wynn, Inc. expects to recover all its costs under the contract. Under these conditions, what amount of revenue should Wynn, Inc. recognize in each of the following years? 20x5 P3,490,000 b. 20x6 P4,020,000 P400,000 20x5 P3,528,222 P8,380,000 20x6 P3,890,323 P4,890,000 a. С. P-0- d.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Subject AFAR
Transcribed Image Text:57. Wynn, Inc. has a contract to construct a large hotel for P12,000,000. The contract was signed
on January 2, 20x4 and it was expected that the hotel would be complete on December 31,
20x7. At the date the contract was signed, Wynn, Inc. anticipated the costs of construction
Would total P11,000,000. At the end of 20x5 the costs incurred were P3,490,000 and its
estimate of total contract costs rose to P11,870,000. During 20x6, the company incurred costs
of P4,020,000 and by the end of 20x6 the total cost estimate rose to P12,400,000. Due to
certain circumstances, Wynn, Inc. believes there are inherent hazards in the contract
beyond the normal, recurring business risks. Wynn, Inc. expects to recover all its costs under
the contract. Under these conditions, what amount of revenue should Wynn, Inc. recognize
in each of the following years?
20x5
P3,490,000
b.
20x6
P4,020,000
P400,000
20x5
P3,528,222
P8,380,000
20x6
P3,890,323
P4,890,000
a.
C.
P-0-
d.
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