n January 1, 2021, ABC enters into a contract to construct a building for a customer. ABC identifies its performance obligation to satisfied over time. ABC uses the input method based on costs to measure its progress on the contract. The contract price is P9M Information on the construction is provided below: 2021 2022 2023 a. Contract cost incurred per year 2,760,000 3,540,000 500,000 b. Billing per year c. Collections on billings per year d. Estimated costs to complete (at each yr. end) 4,140,000 700,000 50% 25% 25% 90% 90% balance Note: • Bilings per year are stated as percentages of the contract price. The contract is non-cancellable. • The collection on billings in 2021 and 2022 are net of 10% retention. "Retention" is an amount withheld by the contracted and payable to the contractor at the end of the contract when the project is completed and accepted. Requirements; a. Compute for the gross profits, 2021 2022 2023
n January 1, 2021, ABC enters into a contract to construct a building for a customer. ABC identifies its performance obligation to satisfied over time. ABC uses the input method based on costs to measure its progress on the contract. The contract price is P9M Information on the construction is provided below: 2021 2022 2023 a. Contract cost incurred per year 2,760,000 3,540,000 500,000 b. Billing per year c. Collections on billings per year d. Estimated costs to complete (at each yr. end) 4,140,000 700,000 50% 25% 25% 90% 90% balance Note: • Bilings per year are stated as percentages of the contract price. The contract is non-cancellable. • The collection on billings in 2021 and 2022 are net of 10% retention. "Retention" is an amount withheld by the contracted and payable to the contractor at the end of the contract when the project is completed and accepted. Requirements; a. Compute for the gross profits, 2021 2022 2023
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:n January 1, 2021, ABC enters into a contract to construct a building for a customer. ABC identifies its performance obligation to satisfied over time.
ABC uses the input method based on costs to measure its progress on the contract. The contract price is P9M
Information on the construction is provided below:
2021
2022
2023
a. Contract cost incurred per year
2,760,000 3,540,000 500,000
b. Billing per year
50%
25%
25%
c. Collections on billings per year
d. Estimated costs to complete (at each yr. end) 4,140,000700,000
90%
90%
balance
Note:
Billings per year are stated as percentages of the contract price. The contract is non-cancellable.
The collection on billings in 2021 and 2022 are net of 10% retention. "Retention" is an amount withheld by the contracted and payable to the
contractor at the end of the contract when the project is completed and accepted.
Requirements;
a. Compute for the gross profits,
2021
2022
2023
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