Ayala Homes is a construction company who uses the percentage of completion method in accounting for its income. The company began constructing a building in the year 2019 for a contract price of P5,000,000. For the year ended 2019, the company billed its clients a total of 30% of the contract price. The books of the company show the following balances: Costs incurred to date P900,000; Construction income to date P300,000. How much is the company's contract asset (liability) for the year 2019? *

Ayala Homes is a construction company who uses the percentage of completion method in accounting for its income. The company began constructing a building in the year 2019 for a contract price of P5,000,000. For the year ended 2019, the company billed its clients a total of 30% of the contract price. The books of the company show the following balances: Costs incurred to date P900,000; Construction income to date P300,000. How much is the company's contract asset (liability) for the year 2019? *

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Description: Show the solution in good accounting form Ayala Homes is a constructioncompany who uses thepercentage of completionmethod in accounting for itsincome. The company beganconstructing a building in theyear 2019 for a contract price ofP5,000,000. For the

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter17: Advanced Issues In Revenue Recognition

Section: Chapter Questions

Problem 9MC

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