How much is the Gross Profit/Loss Realized in 2019?Xurpas Homes entered into a construction agreement in 2018 for the construction of condominiumbuildings. The original contract price was P20,000,000 but a change order was issued in 2019 thatincreases the price by P2,000,000. The percentage of completion method is used by the company inrecognizing revenue. The following are information regarding the company.2018201910,200,000 17,400,0004,350,00016,350,00015,000,000Costs incurred to dateEstimated Costs to CompleteBillings Made10,200,0009,800,0008,760,000Cash Collections

Given: Profit or loss of construction contract: the foreseeable loss on the construction contract is…

Answered: a construction agreement in 2018 for t…

a construction agreement in 2018 for t ct price was P20,000,000 but a change ,000. The percentage of completion me ring are information regarding the compan

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Contract Costing

Contract costing is about tracing particular costs related to a particular contract entered into with the customer. It is one of the forms of job order costing. It is useful in long-term contracts at the most. It is seen that substantial time is required for the completion of the contract which takes different accounting periods. Thus, it is very much helpful for recognizing the costs associated with it and accounting in their specific accounting periods.

Question

How much is the Gross Profit/Loss Realized in 2019?
Xurpas Homes entered into a construction agreement in 2018 for the construction of condominium
buildings. The original contract price was P20,000,000 but a change order was issued in 2019 that
increases the price by P2,000,000. The percentage of completion method is used by the company in
recognizing revenue. The following are information regarding the company.
2018
2019
10,200,000 17,400,000
4,350,000
16,350,000
15,000,000
Costs incurred to date
Estimated Costs to Complete
Billings Made
10,200,000
9,800,000
8,760,000
Cash Collections

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