PROBLEM 8-3. ANTICIPATED LOSSAndrei Construction Company began operations on January 1, 2019. During theyear, Andrei entered into a contract with Lindsey Company to construct amanufacturing facility. At that time, Andrei estimated that it would take 3to complete the facility at a total cost of P4,500,000. The total contract price isP6,300,000.estimated that P4,204,200 more will be needed for its completion. LindseyCompany was billed and paid 30% of the contract price.yearsIn 2019, Andrei incurred P1,185,800 in construction costs andThe following year, Andrei Construction Company incurred P3,299,200 and theengineer's estimate of cost to complete is P2,500,000. It is expected that the projectwill be completed thisyear.Required: Compute the amount to be reported as Contract Revenue, Contract Costs andProfit to appear in the income statement for the years 2019 and 2020.

a. First we need to compute the contract liability based on Completed-contract method. For that…

At that time, Andrei estimated that it would take 3 y at a total cost of P4,500,000. The total contract price is Andrei incurred P1,185,800 in construction costs and 200 more will be needed for its completion. Lindsey nd paid 30% of the contract price. years ndrei Construction Company incurred P3,299,200 and the

At that time, Andrei estimated that it would take 3 y at a total cost of P4,500,000. The total contract price is Andrei incurred P1,185,800 in construction costs and 200 more will be needed for its completion. Lindsey nd paid 30% of the contract price. years ndrei Construction Company incurred P3,299,200 and the

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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