13. In 20x1, Light Co. started work on a construction contract witha fixed price of P4,000,000. Light Co. uses the percentage ofcompletion method and measures its progress based onassessment of the physical completion of the project. Theestimated total contract costs were P3,000,000. Information onthe project is as follows:20x120x21,125,00090%1,425,000Costs incurred per yearPhysical completion of project32%How much are the revenue and cost of construction recognized in20x2?RevenueCost of construction1,740,000a. 2,320,000b. 2,220,0001,560,0001,650,000C. 2,200,000d. 2,390,0001,850,000

Solution Given Contract price =4000000 Total estimated cost =3000000 20X1 20X2…

Answered: How much are the revenue and cost of…

How much are the revenue and cost of construction recognized in 20x2? Revenue Cost of construction a. 2,320,000 b. 2,220,000 1,740,000 1,560,000 C 2,200,000 d. 2.390,000 1,650,000 1,850,000

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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Question

13. In 20x1, Light Co. started work on a construction contract with
a fixed price of P4,000,000. Light Co. uses the percentage of
completion method and measures its progress based on
assessment of the physical completion of the project. The
estimated total contract costs were P3,000,000. Information on
the project is as follows:
20x1
20x2
1,125,000
90%
1,425,000
Costs incurred per year
Physical completion of project
32%
How much are the revenue and cost of construction recognized in
20x2?
Revenue
Cost of construction
1,740,000
a. 2,320,000
b. 2,220,000
1,560,000
1,650,000
C. 2,200,000
d. 2,390,000
1,850,000

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