• ABC completes the construction in 20x3. The actual total uses the 'cost-to-cost' method in measuring its progress on the In 202. ABC incurs actual costs of P2.45M and revizes s ABC Co. estimates total contract costs at completion d estimate of total contract costs at completion to P4.6M. In 20x1, ABC Co. enters into a contact with a customer for the construction of a building. The contract price is P6M. ABC Co. contract. PAM. ABC incurs actual costs of PIM in 20x 1 cost of the contract is P4.5M How much is the profit recognized in 20x32 a. 420,000 450.000 c. 500,000 d. 550,000

• ABC completes the construction in 20x3. The actual total uses the 'cost-to-cost' method in measuring its progress on the In 202. ABC incurs actual costs of P2.45M and revizes s ABC Co. estimates total contract costs at completion d estimate of total contract costs at completion to P4.6M. In 20x1, ABC Co. enters into a contact with a customer for the construction of a building. The contract price is P6M. ABC Co. contract. PAM. ABC incurs actual costs of PIM in 20x 1 cost of the contract is P4.5M How much is the profit recognized in 20x32 a. 420,000 450.000 c. 500,000 d. 550,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

On January 1, 2018, DMCI Company started the construction of a building at a fixed contract price ofP1,000,000. On the same date, the customer paid a mobilization fee equal to 5% of contract price that will be deductible from the first billing. The outcome of construction contract cannot be estimated reliably During 2018, the entity billed the customer equivalent to 30% of the contract price. During 2019, the entity billed again the customer amounting to 20% of the contract price. During 2020, the entity billed again the customer amounting to 40% of the contract price. The remaining billing was made at the year of completion of the project. The entity made collection from the customer at the end of 2018, 2019 and 2020, in the amount of P120,000, P450,000 and P180,000, respectively. The entity provided the following data concerning the direct costs related to the said project: 2018 2019 2020 Cumulative costs incurred at year-end 360,000 800,000 870,000 Remaining estimated costs to…
Use the percentage-completion method and show all calculations and explanation in detail.
Big Construction Company signs a contract on 1 July 2019, agreeing to build a warehouse for Buyer Corporation Ltd at a fixed contract price of $10 million. Buyer Ltd will be in control of the asset throughout the construction process. Big Construction Company estimates that construction costs will be as follows: 2019 2.5 million 2020 $4 million 2021 $1.5 million The contract provides that Buyer Corporation Ltd will make payments on 31 December each year as follows: 2019 $2 million 2020 $5 million 2021 $3 million The contract is completed and accepted on 31 December 2021. Assume that actual costs and cash collections coincide with expectations and that cost (an input measure) is used as the basis for assessing progress on the construction contract. Big Construction Company has a financial year ending 31 December. Required: Using the above data, compute the gross profit to be recognised for each of the three…
On September 1, 20x1, ABC Co. enters into a contract with a customer to remodel a plant's electrical wirings and install a new generator for a total consideration of P10M. The remodeling and the installation single performance obligation treated as a satisfied over time. The expected contract costs Generator LO as follows: Other costs Expected total contract costs 2,500,000 4,000,000 6,500,000 VERSITY Additional information: • ABC Co. uses the cost-to-cost method in measuring its progress towards the complete satisfaction of the performance obligation. • ABC Co. incurs total costs of P4,000,000 in 20x1, including the cost of the generator. The customer obtains control of the generator when it is delivered to the site in December 20x1. However, the generator will not be installed until March 20x2. • • ABC Co. regards the cost of the generator as significant in relation to the expected total contract costs-eating during examinations, quizzes or plagiarism in connection . Although ABC Co.…
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 Costs incurred to date 10,200,000 17,400,000 Estimated Costs to Complete 10,200,000 4,350,000 Billings Made 9,800,000 16,350,000 Cash Collections 8,760,000 15,000,000 HOW MUCH IS THE GROSS PROFIT/LOSS REALIZED IN 2019?
In 20x1, ABC Co. enters into a contract to construct a building for a customer. ABC identifies its performance obligation to be satisfied over time. ABC measures its progress on the contract based on costs incurred. The contract price is P20,000,000. ABC has an unconditional right to all billings made in accordance with the billing schedule stated in the contract. Information on the construction is as follows: 20x1 20x2 Contract costs incurred per year Billings per year Collections on billings 20x3 8,160,000 7,320,000 1,920,000 10,000,000 7,000,000 3,000,000 9,500,000 6,650,000 3,850,000 per year Estimated costs to 1911 complete (at each year-end)er from the Student Ha8,840,000 of 1,720,000 "Cheating during examinations, quizzes or plagiarism in connection with any academic work, abetting of the same: 1st violation- How much profit is recognized on the contract in 20x3? suspension with invalidation of grade; 3rd violation- suspension
hrd.2