Batanes Construction Company recognized gross loss of P78,000 on its long-term project which has accumulated costs of P595,000. To finish the project, the company estimates that it has to incur additional cost of P820,000. What is the contract price?
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
Batanes Construction Company recognized gross loss of P78,000 on its long-term project which has accumulated costs of P595,000. To finish the project, the company estimates that it has to incur additional cost of P820,000.
What is the contract price?
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