On January 1, 2011, DMCI Inc. started the construction of a building with a fixed contract price of P10,000,000. The outcome of the construction project can be estimated reliably and the contractor decided to employ cost to cost method. The following data are provided by the accountant and project manager concerning the construction costs for the three years of construction:
On January 1, 2011, DMCI Inc. started the construction of a building with a fixed contract price of P10,000,000. The outcome of the construction project can be estimated reliably and the contractor decided to employ cost to cost method. The following data are provided by the
|
Year |
12/31/2011 |
12/31/2012 |
12/31/2013
|
|
Costs incurred during the year |
? |
P1,500,000 |
P3,740,000 |
|
Realized gross |
P750,000 |
(P250,000) |
(P800,000) |
|
Percentage of completion as of the end of the year |
37.5% |
50% |
80% |
What is the balance of Construction in Progress on DMCI Inc.’s
A. 7,480,000
B. 7,940,000
C. 8,000,000
D. 8,280,000
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