On March 1, 2022, AGGREGATES Company enters a contract to build a hotel which is estimated to cost P31,200,000. The company recognizes construction revenue over time. Data on this project for 2022-2024 follow: Contract Billings Costs incurred Est'd Costs to complete 2022 10,500,000 5,460,000 20,540,000 2023 12,500,000 9,984,000 13,156,000 2024 14,440,000 15,756,000 - The contract contains a penalty clause that penalizes the company a reduction of P70,000 from the contract price for every week of delay. In 2024, the contract was delayed for 8 weeks. What is the gross profit for 2024? A. 1,164,000 C. 1,724,000 B. 1,466,400 D. 1,824,000
On March 1, 2022, AGGREGATES Company enters a contract to build a hotel which is estimated to cost P31,200,000. The company recognizes construction revenue over time. Data on this project for 2022-2024 follow: Contract Billings Costs incurred Est'd Costs to complete 2022 10,500,000 5,460,000 20,540,000 2023 12,500,000 9,984,000 13,156,000 2024 14,440,000 15,756,000 - The contract contains a penalty clause that penalizes the company a reduction of P70,000 from the contract price for every week of delay. In 2024, the contract was delayed for 8 weeks. What is the gross profit for 2024? A. 1,164,000 C. 1,724,000 B. 1,466,400 D. 1,824,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On March 1, 2022, AGGREGATES Company enters a contract to build a hotel which is estimated to cost P31,200,000. The company recognizes construction revenue over time. Data on this project for 2022-2024 follow:
| Contract Billings | Costs incurred | Est'd Costs to complete | |
| 2022 | 10,500,000 | 5,460,000 | 20,540,000 |
| 2023 | 12,500,000 | 9,984,000 | 13,156,000 |
| 2024 | 14,440,000 | 15,756,000 | - |
The contract contains a penalty clause that penalizes the company a reduction of P70,000 from the contract price for every week of delay. In 2024, the contract was delayed for 8 weeks.
What is the gross profit for 2024?
A. 1,164,000 C. 1,724,000
B. 1,466,400 D. 1,824,000
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