ABC Corp. uses the cost to cost method to account for its construction contracts. The contract price of theproject is P2,000,000. ABC Corp. estimates that it will take 36 months to complete the contract. The followinginformation for its construction contract is presented below:20x120x220x3Cost incurred to date350,0001,250,000?Realized gross profit for the current year50,000300,00080,0001. What is the percentage of completion rate in year 20x1?2. What is the estimated cost to complete in year 20x1?3. What is the percentage of completion rate in year 20x2?4. What is the total estimated cost to complete in 20x3?

Contract Accounting In the construction contract total cost which are incurred in the contract is…

Answered: ABC Corp. uses the cost to cost method…

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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7. Equipment costing PIM is expected to produce 10. 000 pieces of pipes dur ing its economic life before being replaced. Annual production of this equipment is 2, 500 pipes. The equi pment' s scrap value is estimated at P50, 000. The cost of housing the equipment is P25, 000 per year. Costs of power and maintenance per unit are P9. 00 and P7. 00, respectively. Cost of labor is P35. 00 per unit. Use sinking fund method of depreciation with = 12% a. What is the total fixed cost? b. What is the variable cost per unit? c. What is the total cost of production per unit?
A refinery buys 20 million barrels of crude oil at a market price of $25 per barrel on 17th August 20X1. Having processed the oil, the refinery sells its final products in October 20X1 for an average price of $43 per barrel, when the average market price of crude oil is $30 per barrel. Which of the following statements about current replacement cost accounting is/are correct: (i) Cost of sales is $500 million. (ii) The capital maintenance adjustment is $130 million. (iii) Replacement cost profit of $360 million is made on the sale. Select one: a. (i) only b. (ii) only c. No statement is correct d. (i) and (iii) e. (i) and (ii) ○ f. (iii) only g. (ii) and (iii)
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Qb 01.
A refinery buys 20 million barrels of crude oil at a market price of $25 per barrel on 17th August 20X1. Having processed the oil, the refinery sells its final products in October 20X1 for an average price of $43 per barrel, when the average market price of crude oil is $30 per barrel. Which of the following statements about current replacement cost accounting is/are correct: (i) Cost of sales is $500 million. (ii) The capital maintenance adjustment is $130 million. (iii) Replacement cost profit of $360 million is made on the sale. Select one: a. (i) only b. (ii) only c. No statement is correct d. (i) and (iii) e. (i) and (ii) ○ f. (iii) only g. (ii) and (iii)
18. Questions 18 and 19 are based on the following information: Regine Company manufactures plugs used in its manufacturing cycle at a cost of Ph 36 per unit that includes Ph 8 of fixed overhead. Regine needs 30,000 of these plugs annually and Orlan Company has offered to sell these units to Regine at Ph 33 per unit. If Regine decides to purchase the plugs, Ph 60,000 of the annual fixed overhead applied will be eliminated, and the company may be able to rent the facility previously used for manufacturing the plugs. If Regine Company purchases the plugs but does not rent the unused facility, the company would * save Ph 3.00 per unit lose Ph 6.00 per unit save Ph 2.00 per unit lose Ph 3.00 per unit O O
Q3: An engineer determined the payback period of the project contract to be 9 years. The following table presents the project contact cost information: Annual cost First cost 15 M Salvage 5 M Contract 3M Ifi-13%, do you agree with that an engineer, and why?
ABC Co. started work on two separate projects during 20x1. Information on these projects is shown below: NIVS Project Contract price Costs incurred A B 9,000,000 8,000,000 APIE 4,000,000 5,000,000 ERST Estimated costs to complete 4,000,000 Progress billings 5,000,000 8,000,000 What amount is presented in ABC Co's. statement of financial position as contract liability? 1911
Annotatior The Kirby Construction Company was the low bidder on a specialized equipment contract. The contract bid was $5,400,000 with an estimated cost to complete the project of $4,800,000. The contract period was 34 months , beginning March 1, 2014. The company uses the cost-to-cost method to estimate profits. A record of construction activities for the years 2014– 2017 follows: Actual Cost- Cash Progress Billings Year Current Year Receipts 2014 $2,800,000 $2,600,000 $2,200,000 2015 2,200,000 2,100,000 1,900,000 2016 600,000 700,000 700,000 2017 600,000 The estimated cost to complete the contract at the end of each accounting period is: 2014 $2,200,000 Novt
ADIB has signed a Musharaka contract with ADIA ADIA provided 27 9% capital contribution in the project and agreed to the same profit-sharing percentage (279%). In addition, ADIB appointed ADIA as a professional manager on a fee-based arrangement to manage the project. Suppose that at the end of the first year project generates a loss of AED 18,786. What will be the loss share of ADIA?

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