Problem 3 The October 1, 2019, ABC Corp. enters a contract to build a sports arena which it estimated would cost P 3,744,000. ABC bills its client at cost plus 25% and recognized construction revenue on a percentage of completion basis. Data on this project for 2019, 2020 and 2021 as follows: Costs Incurred Estimated Costs To Complete P 655,200.00 2019- 2020- P 2,464,800.00 1,980,000.00 1,578,720.00 2021- 1,890,720.00 Compute for: a. ABC Corps. Realized Gross Profit on the project for 2019 is : b. ABC Corps. Realized Gross Profit(Loss) on the project for 2020 is : c. ABC Corps. Realized Gross Profit(loss) on the project for 2021 is : |

Problem 3 The October 1, 2019, ABC Corp. enters a contract to build a sports arena which it estimated would cost P 3,744,000. ABC bills its client at cost plus 25% and recognized construction revenue on a percentage of completion basis. Data on this project for 2019, 2020 and 2021 as follows: Costs Incurred Estimated Costs To Complete P 655,200.00 2019- 2020- P 2,464,800.00 1,980,000.00 1,578,720.00 2021- 1,890,720.00 Compute for: a. ABC Corps. Realized Gross Profit on the project for 2019 is : b. ABC Corps. Realized Gross Profit(Loss) on the project for 2020 is : c. ABC Corps. Realized Gross Profit(loss) on the project for 2021 is : |

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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1.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 BillingsCosts incurredEst’d Costs to Complete2022 10,500,000 5,460,000 20,540,0002023 12,500,000 9,984,000 13,156,0002024 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 weeksWhat is the gross profit for 2024?A. 1,164,000 C. 1,724,000B. 1,466,400 D. 1,824,000 2.MOC Construction Company started work on three job sites during the current year. Any costs incurred are expected to be recoverable. Data relating to the three jobs are given below:Site Contract PriceCost IncurredEstimated Costs to CompleteBillings on ContractCollections on Billings1 5,000,000 3,750,000 - 5,000,000 5,000,0002 7,000,000 1,000,000 4,000,000 900,000…
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Manor Construction Corporation entered into a fixed-price contract to construct an office building for P5,000,000 during the year 2021. Information relating to the contract is as follows: Year-end 2021 Year-end 2022 Percentage of completion 20% 60% Estimated total cost of completion 3,750,000 4,000,000 Income recognized (cumulative) 250,000 600,000 Contract cost incurred during 2022 was: O 1,750,000 2,400,000 O 1,600,000 O 1,650,000
Problem 2. The Jay-R Construction Corporation uses the percentage of completion method of recognizing income from long-term construction contracts. In 2018, Anthonette entered into a fixed price contract to construct a bridge for P 30,000,000. Estimated cost to complete the construction and contract costs incurred up to 2020 were as follows: Cumulative Contract Costs Estimated cost to Incurred Complete As of Dec 31, 2018 As of Dec 31, 2019 As of Dec 31, 2020 P 2,000, 000 11, 000, 000 P 16, 000, 000 11, 000, 000 20, 000, 000 5, 000, 000 What is the estimated percentage of completion as of December 31, 2020? How much income should Jay-R Construction recognize on the above contract for the year ended December 31, 2019? 1. 2.
Pharoah Construction entered into a contract to construct a bridge for a contract price of $2.95 million. Construction began in 2019 and was completed in 2021. Below are the details of the transactions related to the contract: 2019 2020 2021 Costs incurred during the year $649,000 $836,000 $693,900 Estimated costs to complete 1,427,800 515,000 0 Calculate the revenue, expenses and gross profit to be recognized each year using the percentage-of-completion method. (Round the percentage completion to 2 decimal places, e.g. 52.75% and other answers to 0 decimal places, e.g. 1,525.) 2019 2020 2021 Revenue $ $ $ Expenses Gross Profit $ $ $
Problem 1. Jhun Co. recognizes construction revenues and expenses using the percentage of completion method. During 2019, a single long-term contract was started, which continued through the year 2020. Information the project follows: 2019 2020 P 100,000 105,000 122,000 Account receivable on contract P 300,000 Construction expense Construction in progress 192,000 364,000 Partial billings on contract 100,000 420,000 Profit recognized in 2019 should be? Profit recognized in 2020 should be?
Problem 3: Roman Construction Company (RCC) agrees to build a large office building for Carmen Towers for a total contract price of P5,000,000. The contract is signed on October 1, 2019 and RCC's year end is December 31. The total anticipated costs at October 1, 2019 is P4,500,000. Below gives further information about the contract: Total 4,000,000 2019 2020 2021 Cost incurred each year Estimated cost to complete at year end Progress billing Progress payments 1,350,000 2,250,000 400,000 3,150,000 400,000 275,000 2,100,000 400,000 2,000,000 2,600,000 2,625,000 5,000,000 5,000,000 Requirement: a. Compute for the gross profit / loss each year. b. Compute for the construction revenue for each year. c. Journal entries for 2019, 2020 and 2021, under the traditional accounting and under PFRS 15. d. Show all computations in good form.
Assume Nortel Networks contracted to provide a customer with Internet infrastructure for $2,860,000. The project began in 2021 and was completed in 2022 Data relating to the contract are summarized below: 2021 $ 372,000 $1,899,00e 1,488,eee 524,000 318,eee 2022 Costs incurred during the year Estimated costs to complete as of 12/31 Billings during the year Cash collections during the year 2,336,800 2,542, 000 Required: 1. Compute the amount of revenue and gross profit or loss to be recognized in 2021 and 2022 assuming Nortel recognizes revenue over time occording to percentege of completion. 2. Compute the amount of revenue and gross profit or loss to be recognized in 2021 and 2022 ssuming this project does not qualify for revenue recognition over time. 3. Prepare a partial balance sheet to show how the information related to this contract would be presented ot the end of 2021 assuming Nortel recognizes revenue over time according to percentege of completion. 4. Prepare a partial…
On February 20, 2022, ABC Construction Company entered into a fixed-price contract to construct a commercial building for P9,000,000. ABC determined that the performance obligation is satisfied over time. Information relating to the contract is as follows: 2022 2023 25% 75% Percentage of campletion Estimated costs at completion P6,750,000 P7,200,000 How much is the contract costs charged to profit ar loss in 2022?
How much is the contract revenue to date in the year 2019?
In 2021, ABC Company agreed to construct a commercial building at a price of P7,500,000. ABC uses the percentage of completion method. The information relating to the costs and billings for the contract were as follows: 2021 2022 2023 Cost P2,100,000 P4,500,000 P5,887,500 incurred to date Estimated 3,900,000 1,500,000 cost to complete 7,500,000 Progress billings to date 1,125,000 3,000,000 Collection 900,000 2,400,000 7,050,000 to date How much is the contract asset (liability) as of December 31, 2022 using View 1 of the PIC? Group of answer choices (P2,625,000) (P1,500,000) P2,625,000 P1,500,000