In 20x1, ABC Co. enters into a contract to construct a building for a customer. ABC identifies its performance obligation to be satisfied over time. ABC measures its progress on the contract based on costs incurred. The contract price is P20,000,000. ABC has an unconditional right to all billings made in accordance with the billing schedule stated in the contract. Information on the construction is as follows: 20x1 20x2 20x3 Contract costs incurred per year Billings per year Collections on billings 8,160,000 7,320,000 1,920,000 10,000,000 7,000,000 3,000,000 9,500,000 6,650,000 3,850,000 per year Estimated costs to 1911 complete (at each year-end) from the Student Ha8,840,000 1,720,000 er Cheating during examinations, quizzes or plagiarism in connection with any academic work, abetting of the same: 1st violation- How much profit is recognized on the contract in 20x3?

In 20x1, ABC Co. enters into a contract to construct a building for a customer. ABC identifies its performance obligation to be satisfied over time. ABC measures its progress on the contract based on costs incurred. The contract price is P20,000,000. ABC has an unconditional right to all billings made in accordance with the billing schedule stated in the contract. Information on the construction is as follows: 20x1 20x2 20x3 Contract costs incurred per year Billings per year Collections on billings 8,160,000 7,320,000 1,920,000 10,000,000 7,000,000 3,000,000 9,500,000 6,650,000 3,850,000 per year Estimated costs to 1911 complete (at each year-end) from the Student Ha8,840,000 1,720,000 er Cheating during examinations, quizzes or plagiarism in connection with any academic work, abetting of the same: 1st violation- How much profit is recognized on the contract in 20x3?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: On February 20, 2022, ABC Construction Company entered into a fixed-price contract to construct a…

A: Calculation of total Amount of Contract Costs charged to Profit and Loss in 2022::: Total Estimated…

Q: Prepare the t-accounts for construction in progress, billings on construction in progress, and…

A: 1. Prepare the T-accounts for construction in progress, billings on construction in progress, and…

Q: The following information pertains to the customer contract: Contract price 238,149 Fair value of…

A: Unearned revenue is the amount received by the company in advance. This is the revenue earned before…

Q: Supplier Corp. enters into a government contract during the year to provide computer equipment for…

A: The Revenue Recognition principle of Accounting states that every entity should recognize revenue…

Q: 14. Dawn Co. was contracted to build a house for a customer. The contract price was P25,000,000.…

A: Under percentage completion method, the revenue and gross profit are recognized on the basis of…

Q: r Corp. for the contract are $2,240,000. The equipment is highly specialized and has no alte ted in…

A: Revenue Recognition means the recording of revenues of an entity in its books. It is an accrual…

Q: Rice Corp. recognizes revenue over time to account for long-term contracts and has the following…

A: The revenue under contract costs is recognized on the basis of degree of completion. Degree of…

Q: Duke Ltd has a contract with a customer ongoing at the end of the financial year, 31 December 2020.…

A: The percentage of completion method reports revenues and expenses in terms of the work completed to…

Q: In 20x1, Devin Co. enters into a contract to construct a building for a customer. Devin Co.…

A: Comment; We’ll answer the first question since the exact one wasn’t specified. Please submit a new…

Q: A company is accounting for a long-term construction contract where revenue is recognized over time.…

A: Revenue Recognition A corporation should account for revenue as soon as it fulfils the contract's…

Q: In a construction contract assigned to a contractor, according to the table shown below. The…

A: The construction contract pricing comprises the cost of the direct project including field…

Q: Which of the following should be shown on the statement of financial position at December 31, 2023…

A: It is a method used for accounting for construction contracts. In this approach, revenue is…

Q: please help me

A: Introduction: Contract costing is the calculation of relevant costs associated with a specific…

Q: Prepare a schedule showing the profit to be recognized each year. Prepare all journal entries…

Q: Recording Revenue Under a Contract Modification Traders Inc. enters into a three-year office…

A: These entries recognize the revenue earned by Traders Inc. for each year of the contract. The…

Q: Computing Revenue and Gross Profit on Long-term Construction Contract Supplier Corp. enters into a…

A: Revenue Recognition means the recording of revenues of an entity in its books. It is an accrual…

Question

In 20x1, ABC Co. enters into a contract to construct a building
for a customer. ABC identifies its performance obligation to be
satisfied over time. ABC measures its progress on the
contract based on costs incurred. The contract price is
P20,000,000. ABC has an unconditional right to all billings
made in accordance with the billing schedule stated in the
contract. Information on the construction is as follows:
20x1
20x2
Contract costs incurred
per year
Billings per year
Collections on billings
20x3
8,160,000 7,320,000
1,920,000
10,000,000 7,000,000 3,000,000
9,500,000 6,650,000 3,850,000
per year
Estimated costs to
1911
complete (at each
year-end)er from the Student Ha8,840,000 of 1,720,000
"Cheating during examinations, quizzes or plagiarism in connection
with any academic work, abetting of the same: 1st violation-
How much profit is recognized on the contract in 20x3?
suspension with invalidation of grade; 3rd violation- suspension

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1 Introduction

VIEW

Step 2 Solution

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Colorado Inc. constructed a factory during 2020 and 2021 under contract with Pacific Machinery Co. Relevant data are summarized below: Contract price Cost Gross profit Contract billings $3,000,000 2020 1,200,000 2021 600,000 2020 800,000 2021 400,000 2020 1,500,000 2021 1,500,000 Colorado Inc. recognizes revenue over time with respect to this contract. In its December 31, 2020, balance sheet, Colorado would report: ● The contract asset, cost and profit in excess of billings, $500,000. The contract liability, billings in excess of cost, of $300,000. The contract asset, contract amount in excess of billings, of $1,500,000. The contract asset, deferred profit, of $400,000.
Lark Corp. appropriately determined that each of its long-term projects represents a single performance obligation that is satisfied over time. At the end of the current year, Lark estimates that its costs to complete a project exceed the contract price, so that an overall loss on the contract is anticipated. Required: What journal entry will Lark record at the end of the current year, given the following information? • Revenue to date is $350,000 ($175,000 of which is to be recognized in the current year). • The expense recognized previously was $100,000. • An overall loss of $30,000 is anticipated
On September 1, 20x1, ABC Co. enters into a contract with a customer to remodel a plant's electrical wirings and install a new generator for a total consideration of P10M. The remodeling and the installation single performance obligation treated as a satisfied over time. The expected contract costs Generator LO as follows: Other costs Expected total contract costs 2,500,000 4,000,000 6,500,000 VERSITY Additional information: • ABC Co. uses the cost-to-cost method in measuring its progress towards the complete satisfaction of the performance obligation. • ABC Co. incurs total costs of P4,000,000 in 20x1, including the cost of the generator. The customer obtains control of the generator when it is delivered to the site in December 20x1. However, the generator will not be installed until March 20x2. • • ABC Co. regards the cost of the generator as significant in relation to the expected total contract costs-eating during examinations, quizzes or plagiarism in connection . Although ABC Co.…
Zentric Garage Inc. enters into a contract to provide services totaling $78,000. The contract includes a potential performance bonus based on when Zentric Garage completes the services. Zentric Garage estimates the following scenarios for completion. (Click the icon to view the scenarios.) Determine the bonus using the most-likely-amount approach. Determine the bonus using the most-likely-amount approach under scenario 1. The bonus for this contract using the most-likely-amount approach under scenario 1 is $ Determine the bonus using the most-likely-amount approach under scenario 2. The bonus for this contract using the most-likely-amount approach under scenario 2 is $ Determine the bonus using the most-likely-amount approach under scenario 3. The bonus for this contract using the most-likely-amount approach under scenario 3 is $ Ente Scenarios Complete within 3 days 5 days 8 days Probability Bonus Scenario 1 Scenario 2 80% 47% 15% 38% 5% 15% $ 13,000 $ 8,000 $ 3,500 Print Done…