Compute the amount of the bonus for 2022.  2. Orlando Company has a contract with its CEO to pay him a bonus during each of the years 2021 – 2024.  The profit before deductions for bonus and income taxes were P14,500,000 in 2021; P18,000,000 in 2022; P22,500,000 in 2023; and P25,000,000 in 2024. The bonus of 25% is deductible for tax purposes in each year. The tax rate is 20%. The 2024 bonus is based on profit after bonus and taxes Compute the amount of the bonus for 2024 3. Wizards Company sold 4,100,000 boxes of apple pie mix. Each box contains one coupon, in which 10 coupons, with P5 entitles the customer to a baking pan. Wizards company pays P18 per pan and P2 for handling and shipping.  Wizards company estimates that 70% of the coupons will be redeemed, even though only 2,150,000 coupons had proceeded during 2023. The liability for unredeemed coupons on its December 31, 2023 is

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Contract Costing

Contract costing is about tracing particular costs related to a particular contract entered into with the customer. It is one of the forms of job order costing. It is useful in long-term contracts at the most. It is seen that substantial time is required for the completion of the contract which takes different accounting periods. Thus, it is very much helpful for recognizing the costs associated with it and accounting in their specific accounting periods.