On Oct. 1, 20x1, ABC Co. enters into a construction contract with a customer. The performance obligation in the contract will be satisfied over time. ABC Co. uses the "cost-to-cost" method in measuring its progress. The estimated total contract cost is P1OM. In 20x1, ABC Co. incurred a total cost of P6M, which includes P2M advance payment to a subcontractor (the subcontracted work is not yet started) and P200,000 cost of materials not yet installed. ABC Co. does not regard the cost of the unused materials as significant in relation to the expected total contract costs. Moreover, ABC Co. retains control over the unused materials because it can use them in a contract with another customer. The contract price is P20M. How much is the revenue recognized in 20x1? 7,600,000 12,000,000 8,200,000 11,600,000

On Oct. 1, 20x1, ABC Co. enters into a construction contract with a customer. The performance obligation in the contract will be satisfied over time. ABC Co. uses the "cost-to-cost" method in measuring its progress. The estimated total contract cost is P1OM. In 20x1, ABC Co. incurred a total cost of P6M, which includes P2M advance payment to a subcontractor (the subcontracted work is not yet started) and P200,000 cost of materials not yet installed. ABC Co. does not regard the cost of the unused materials as significant in relation to the expected total contract costs. Moreover, ABC Co. retains control over the unused materials because it can use them in a contract with another customer. The contract price is P20M. How much is the revenue recognized in 20x1? 7,600,000 12,000,000 8,200,000 11,600,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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