AnswerNo. 24 Using the Percentage of completion Method, the realized gross profit or loss for the year 2021 is:a. 822,500b. -35,000c. 840,000d. -122,500No. 16 (the other picture: Roman Construction Company)The billings in excess of cost or the cost in excess of billings to be reported in the balance sheet as od December 31,2019a. 20,000 excess of cost over billingsb. 20,000 excess of billings over costc. 900,000 excess of cost over billingsd. 900,000 excess of billings over costProvide a complete solution. Thank You Chapter 8- Long Term Construction ContractsIncurred cost of materials, labor and overhead used in the work, P2,400,000.Paid costs of materials purchased but set aside for use in a future date forthis project, P200,000. These materials do not have any alternative use andcannot be sold to other parties.Paid and incurred rectification work no expected to be recovered, P260,000.Incurred general and administrative costs that are not reimbursable,P100,000.Incurred selling costs, P60,000.Incidental income from the sale of certain materiałs, P40,000. These specificmaterials were sold since it was considered surplus from the early phase ofthe construction.The engineers determined that the original estimate of costs did not includeany expected warranty costs of P200,000.23. Determine the profit for the first year.P600,000P220,000a.P840,000C.b.P715,000d.On August 1, 2019, Panglao Construction Company obtain a contract to constructa low rise building in Taguig City. The building was estimated to cost P17.5M andis scheduled for completion on October 2021. The contract contains a penaltyclause to the effect that the other party is to deduct P35,000 from the contract pricefor each week of delay. Completion was delayed for 5 weeks. Below are the datapertaining to the construction period.201920202021Costs incurredEstimated cots to completeProgress BillingsP1,750,0007,000,0001,400,000P1,085,000P6,440,000910,00015,225,0004,200,00024. Using the percentage of completion method, the realized gross profit (loss( forthe 2021 is:yearP822,500b. (P35,000)a.P840,000C.d.(P122,500) On March T, 2018, Roman Construction Company was contracted to construct awarehouse building for Sunflower Manufacturing Company for total contractprice of P8,400,000. The following data are available for the 3 years:12/31/19P2,600,00012/31/18P3,200,000ndencoP3,200,00012/31/20P1,450,000Contract Costs incurredduring the yearEst. costs to complete at12/31Progress billings each yearP1,450,000POP3,200,000P3,500,000 P1,700,000Roman Construction Company uses the percentage of completion method foraccounting for long term contracts.

This question deals with the concept of percentage of completion method:- As per percentage of…

Answered: No. 24 Using the Percentage of…

FINANCIAL ACCOUNTING

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ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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No. 24 Using the Percentage of completion Method, the realized gross profit or loss for the year 2021 is:

a. 822,500

b. -35,000

c. 840,000

d. -122,500

No. 16 (the other picture: Roman Construction Company)

The billings in excess of cost or the cost in excess of billings to be reported in the balance sheet as od December 31,2019

a. 20,000 excess of cost over billings

b. 20,000 excess of billings over cost

c. 900,000 excess of cost over billings

d. 900,000 excess of billings over cost

Provide a complete solution. Thank You

Chapter 8- Long Term Construction Contracts
Incurred cost of materials, labor and overhead used in the work, P2,400,000.
Paid costs of materials purchased but set aside for use in a future date for
this project, P200,000. These materials do not have any alternative use and
cannot be sold to other parties.
Paid and incurred rectification work no expected to be recovered, P260,000.
Incurred general and administrative costs that are not reimbursable,
P100,000.
Incurred selling costs, P60,000.
Incidental income from the sale of certain materiałs, P40,000. These specific
materials were sold since it was considered surplus from the early phase of
the construction.
The engineers determined that the original estimate of costs did not include
any expected warranty costs of P200,000.
23. Determine the profit for the first year.
P600,000
P220,000
a.
P840,000
C.
b.
P715,000
d.
On August 1, 2019, Panglao Construction Company obtain a contract to construct
a low rise building in Taguig City. The building was estimated to cost P17.5M and
is scheduled for completion on October 2021. The contract contains a penalty
clause to the effect that the other party is to deduct P35,000 from the contract price
for each week of delay. Completion was delayed for 5 weeks. Below are the data
pertaining to the construction period.
2019
2020
2021
Costs incurred
Estimated cots to complete
Progress Billings
P1,750,000
7,000,000
1,400,000
P1,085,000
P6,440,000
910,000
15,225,000
4,200,000
24. Using the percentage of completion method, the realized gross profit (loss( for
the 2021 is:
year
P822,500
b. (P35,000)
a.
P840,000
C.
d.
(P122,500)

On March T, 2018, Roman Construction Company was contracted to construct a
warehouse building for Sunflower Manufacturing Company for total contract
price of P8,400,000. The following data are available for the 3 years:
12/31/19
P2,600,000
12/31/18
P3,200,000
ndenco
P3,200,000
12/31/20
P1,450,000
Contract Costs incurred
during the year
Est. costs to complete at
12/31
Progress billings each year
P1,450,000
PO
P3,200,000
P3,500,000 P1,700,000
Roman Construction Company uses the percentage of completion method for
accounting for long term contracts.

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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