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In 20x1, Metallica Co. enters into a construction contract with a customer. The transaction price in the contract is ₱1,200,000. At contract inception, Metallica Co. estimates a total contract cost of ₱944,000. The actual costs incurred in 20x1 are ₱590,000. The estimated cost to complete on December 31, 20x1 is ₱410,000. Progress billings during the year amount to ₱70,000, ₱60,000 of which is collected.   At contract inception, Metallica Co. determines that its performance obligation in the contract is a single performance obligation that is satisfied over time. Metallica Co. uses the cost-to-cost method to measure its progress in the contract. How much is the profit recognized in 20x1? a. 118,000                                     c. 122,000 b. 120,800                                     d. 132,200

In 20x1, Metallica Co. enters into a construction contract with a customer. The transaction price in the contract is ₱1,200,000. At contract inception, Metallica Co. estimates a total contract cost of ₱944,000. The actual costs incurred in 20x1 are ₱590,000. The estimated cost to complete on December 31, 20x1 is ₱410,000. Progress billings during the year amount to ₱70,000, ₱60,000 of which is collected.   At contract inception, Metallica Co. determines that its performance obligation in the contract is a single performance obligation that is satisfied over time. Metallica Co. uses the cost-to-cost method to measure its progress in the contract. How much is the profit recognized in 20x1? a. 118,000                                     c. 122,000 b. 120,800                                     d. 132,200

FINANCIAL ACCOUNTING
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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In 20x1, Metallica Co. enters into a construction contract with a customer. The transaction price in the contract is ₱1,200,000. At contract inception, Metallica Co. estimates a total contract cost of ₱944,000. The actual costs incurred in 20x1 are ₱590,000. The estimated cost to complete on December 31, 20x1 is ₱410,000. Progress billings during the year amount to ₱70,000, ₱60,000 of which is collected.

 

  1. At contract inception, Metallica Co. determines that its performance obligation in the contract is a single performance obligation that is satisfied over time. Metallica Co. uses the cost-to-cost method to measure its progress in the contract. How much is the profit recognized in 20x1?

a. 118,000                                     c. 122,000

b. 120,800                                     d. 132,200

 

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