D Company entered into a construction agreement in x4 for the rip- rapping of Pier 4. The original contract price was P9,600,000 but a change order was issued in x5 increasing the contract price by P480,000. D uses the percentage of completion method of revenue recognition on long-term construction contracts. The following information are obtained on the project of x4 and x5. Cost incurred to date Estimated costs to complete. Billings made Cash collections. x4 x5 a. (P960,000) b. (P480,000) P4,920,000 4,920,000 5,280,000 4,380,000 What is the gross profit (loss) of D on the project for x5? c. (P1,080,000) d. (P840,000) P8,640,000 2,160,000 8,520,000 -7,500,000
D Company entered into a construction agreement in x4 for the rip- rapping of Pier 4. The original contract price was P9,600,000 but a change order was issued in x5 increasing the contract price by P480,000. D uses the percentage of completion method of revenue recognition on long-term construction contracts. The following information are obtained on the project of x4 and x5. Cost incurred to date Estimated costs to complete. Billings made Cash collections. x4 x5 a. (P960,000) b. (P480,000) P4,920,000 4,920,000 5,280,000 4,380,000 What is the gross profit (loss) of D on the project for x5? c. (P1,080,000) d. (P840,000) P8,640,000 2,160,000 8,520,000 -7,500,000
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 16RE
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Question
![D Company entered into a construction agreement in x4 for the rip-
rapping of Pier 4. The original contract price was P9,600,000 but a
change order was issued in x5 increasing the contract price by P480,000.
D uses the percentage of completion method of revenue recognition on
long-term construction contracts. The following information are obtained
on the project of x4 and x5.
Cost incurred to date
Estimated costs to complete..
Billings made
Cash collections.
x4 x5
a. (P960,000)
b. ( P480,000)
P4,920,000
4,920,000
5,280,000
4,380,000
What is the gross profit (loss) of D on the project for x5?
c. (P1,080,000)
d. (P840,000)
P8,640,000
2,160,000
8,520,000
7,500,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F2b874ba4-15ee-471b-87f0-56c60d8ffd9a%2F268010d9-2028-4144-a2ed-377708ab1311%2F47q31bl_processed.jpeg&w=3840&q=75)
Transcribed Image Text:D Company entered into a construction agreement in x4 for the rip-
rapping of Pier 4. The original contract price was P9,600,000 but a
change order was issued in x5 increasing the contract price by P480,000.
D uses the percentage of completion method of revenue recognition on
long-term construction contracts. The following information are obtained
on the project of x4 and x5.
Cost incurred to date
Estimated costs to complete..
Billings made
Cash collections.
x4 x5
a. (P960,000)
b. ( P480,000)
P4,920,000
4,920,000
5,280,000
4,380,000
What is the gross profit (loss) of D on the project for x5?
c. (P1,080,000)
d. (P840,000)
P8,640,000
2,160,000
8,520,000
7,500,000
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