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

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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