Egay Construction Corporation contracted with the province of Pampanga to construct a bridge at a contract price of P16,000,000. Egay Corporation expects to earn P1,520,000 on the contract. The percentage of completion method is to be used and the completion stage is to be determined by estimates made by the engineer. The following schedule summarizes the activities of the contract for years x0-x2. Cost Year xo x1 x2. Estimate Cost to Incurred Complete P4,600,000 P9,640,000 4,500,000 5,100,000 5,250,000 0 Engineer's Estimate of Billings xo a. P545,600; p b. P545,600; c. P1,760,000; d. P1,760,000; Completion 31% 58% 100%) A 10% retainer accounts for the difference between billings and collections. Under the percentage of completion method, using the engineer's estimate as the measure of completion to be applied to revenues and costs, how much is the gross profit earned each year? P1,044,000; P6,400,000; P1,800,000; x1 x2 P 498,400; P 606,000 Collection on Contract on Billings P5,000,000 P4,500,000 6,000,000 5,400,000* 5,000,000 6,100,000 P1,044,000 P1,650,000 P1,650,000
Egay Construction Corporation contracted with the province of Pampanga to construct a bridge at a contract price of P16,000,000. Egay Corporation expects to earn P1,520,000 on the contract. The percentage of completion method is to be used and the completion stage is to be determined by estimates made by the engineer. The following schedule summarizes the activities of the contract for years x0-x2. Cost Year xo x1 x2. Estimate Cost to Incurred Complete P4,600,000 P9,640,000 4,500,000 5,100,000 5,250,000 0 Engineer's Estimate of Billings xo a. P545,600; p b. P545,600; c. P1,760,000; d. P1,760,000; Completion 31% 58% 100%) A 10% retainer accounts for the difference between billings and collections. Under the percentage of completion method, using the engineer's estimate as the measure of completion to be applied to revenues and costs, how much is the gross profit earned each year? P1,044,000; P6,400,000; P1,800,000; x1 x2 P 498,400; P 606,000 Collection on Contract on Billings P5,000,000 P4,500,000 6,000,000 5,400,000* 5,000,000 6,100,000 P1,044,000 P1,650,000 P1,650,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![Egay Construction Corporation contracted with the province of
Pampanga to construct a bridge at a contract price of P16,000,000. Egay
Corporation expects to earn P1,520,000 on the contract. The percentage
of completion method is to be used and the completion stage is to be
determined by estimates made by the engineer. The following schedule
'summarizes the activities of the contract for years x0-x2.
Estimate
Cost to
Cost
Year Incurred
х0
P4,600,000
4,500,000
5,250,000
xl
x2
Engineer's
Estimate of
Complete
P9,640,000
5,100,000
-0-
x0
a. P545,600;
b. P545,600;
Billings
Completion
31% 71
58%
100%
60
*A 10% retainer accounts for the difference
collections.
between billings and
br
Under the percentage of completion method, using the engineer's estimate
as the measure of completion to be applied to revenues and costs, how
much is the gross profit earned each year?id
x1
x2
P 498,400; P 606,000
P1,044,000;
c. P1,760,000;
P6,400,000;
d. P1,760,000; P1,800,000;
Collection
on Contract on Billings
P5,000,000 P4,500,000*
6,000,000 5,400,000*
5,000,000. 6,100,000
P1,044,000
P1,650,000
P1,650,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff01d591d-ea41-4686-bdef-6906c5e627e8%2Fd7f40fb7-d547-41b0-80f3-883d0a88327f%2Ft4pcx2_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Egay Construction Corporation contracted with the province of
Pampanga to construct a bridge at a contract price of P16,000,000. Egay
Corporation expects to earn P1,520,000 on the contract. The percentage
of completion method is to be used and the completion stage is to be
determined by estimates made by the engineer. The following schedule
'summarizes the activities of the contract for years x0-x2.
Estimate
Cost to
Cost
Year Incurred
х0
P4,600,000
4,500,000
5,250,000
xl
x2
Engineer's
Estimate of
Complete
P9,640,000
5,100,000
-0-
x0
a. P545,600;
b. P545,600;
Billings
Completion
31% 71
58%
100%
60
*A 10% retainer accounts for the difference
collections.
between billings and
br
Under the percentage of completion method, using the engineer's estimate
as the measure of completion to be applied to revenues and costs, how
much is the gross profit earned each year?id
x1
x2
P 498,400; P 606,000
P1,044,000;
c. P1,760,000;
P6,400,000;
d. P1,760,000; P1,800,000;
Collection
on Contract on Billings
P5,000,000 P4,500,000*
6,000,000 5,400,000*
5,000,000. 6,100,000
P1,044,000
P1,650,000
P1,650,000
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