• 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

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ABC Co. began constructing a condominium on January 1, 2017 for a contract price of P1,250,000. The entity has assured collection of its contract and the costs can be reliably estimated. For the year ended December 31, 2018, ABC Co billed its client an additional 60% of the contract price. Data relating to the construction are as follows: 2017 2018 2019 Construction Progress 300,000 ? ? Estimated Cost to Complete ? ? - Costs Incurred 250,000 600,000 112,500 Excess of CIP over PB 25,000 (125,000) HOW MUCH IS THE GROSS PROFIT/LOSS REALIZED IN 2018? Kindly show your solution in a good accounting form. Thank you!
DMCI entered into a fixed price contract for the construction of a road for Camella Corp. DMCI determines the stage of completion of construction contracts using the "cost to cost method". The estimated total contract cost is P50 million. The following were the total actual costs incurred by DMCI during the first year of the construction: Cost of negotiating the contract (charge immediately as expense) 500,000 Costs of hiring equipment 700,000 Costs of materials purchased but not yet used in construction 2,500,000 Costs of materials used in construction 15,000,000 Costs of moving plant, equipment and materials to and from the 200,000 contract site Depreciation of equipment used in construction 600,000 Depreciation of idle construction equipment 300,000 Site labor costs 5,000,000 Site supervision costs 1,000,000 How much is the cost incurred to date?
Crane Construction Co. uses the percentage-of-completion method. In 2021, Crane began work on a contract for $24475000; it was completed in 2022. The following cost data pertain to this contract: Year Ended December 31 2021 2022 Cost incurred during the year $8350000 $6150000 Estimated costs to complete at the end of year 5739000 If the completed-contract method of accounting was used, the amount of gross profit to be recognized for years 2021 and 2022 would be 2021 2022 $9975000. $(411000). $0. $10386000. $10386000. $0. $0. $9975000. O O
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Bella Construction Co. uses the percentage-of-completion method. In 20x1, Bella began work on a contract for $2,477,005; it was completed in 20x2. The following cost data pertain to this contract: Year ended December 31, 20x1 Year ended December 31, 20x2 Costs incurred during the year $869,041 $559,369 Estimated costs to complete at the of year $494,825 - The amount of gross profit to be recognized on the income statement for the year ended December 31, 20x2 is: a. $553,770 b. $339,315 c. $1,048,595 d. $1,113,139