In 2019, DJ Builders Construction agreed to construct an apartment building at a price of P2,000,000. The information relating to the costs and billings for the contract is as follows: 2019 Direct and allocable costs to date.. Estimated costs yet to be incurred. Customer billings each year......... Collection of billings each year. ...P 560,000 P 1,040,000 ..750,000 .560,000 2020 1,200,000 400,000 560,000 640,000 2021 P1,570,000 -0- 730,000 840,000 During 2020 the customer agrees to a variation with increases expected revenue from the contract by P40,000 and causes additional costs of P20,000. At the end of 2020 there are materials stored on site for use in 2021 which cost P16,000 during the period. Required: A. Prepare journal entries each year using: 1. Percentage-of-completion method/Over Time 2. Cost recovery method of construction accounting (Hybrid Method or Zero-profit Approach).

In 2019, DJ Builders Construction agreed to construct an apartment building at a price of P2,000,000. The information relating to the costs and billings for the contract is as follows: 2019 Direct and allocable costs to date.. Estimated costs yet to be incurred. Customer billings each year......... Collection of billings each year. ...P 560,000 P 1,040,000 ..750,000 .560,000 2020 1,200,000 400,000 560,000 640,000 2021 P1,570,000 -0- 730,000 840,000 During 2020 the customer agrees to a variation with increases expected revenue from the contract by P40,000 and causes additional costs of P20,000. At the end of 2020 there are materials stored on site for use in 2021 which cost P16,000 during the period. Required: A. Prepare journal entries each year using: 1. Percentage-of-completion method/Over Time 2. Cost recovery method of construction accounting (Hybrid Method or Zero-profit Approach).

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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Explain clearly
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