On March 1, 2021, AST Corporation contracted to build two buildings for a total contract price of P27M. The contract specifies that payment will only occur after both buildings have been completed and transferred to the client. The stand-alone selling price of the Building No. 1 is 20M and Building No. 2 is P10M. On December 1, 2022, Building No. 1 was completed and transferred, the journal entry to record this transaction include a debit to: * Contract asset, P18M Cost of construction, P18M Account receivable, P20M Contract asset, P20M

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Contract Costing

Contract costing is about tracing particular costs related to a particular contract entered into with the customer. It is one of the forms of job order costing. It is useful in long-term contracts at the most. It is seen that substantial time is required for the completion of the contract which takes different accounting periods. Thus, it is very much helpful for recognizing the costs associated with it and accounting in their specific accounting periods.