That was the total estimated gross profit recognized or realized as of December 31, 2018?What was the estimated gross profit (loss) recognized or realized for the year ended December 31, 2019? RAMOS BUILDERS, Inc. entered into a P10,000,000 contract to construct a multi-purpose recreational facility.The estimated cost to complete the project was P8,000,000 and the contract period was 36 months startingJanuary 1, 2017. The company uses the cost-to-cost method of estimating earnings. On January 1, 2018, thecontract price was reduced to P9,500,000 due to the many changes made to the original contract. Theaccounting records relating to this contact for the years 2017 to 2019 disclosed the following:Progress BillingsP2,800,0004,000,0002,700,000Actual Cost Current YearEstimated Cost to CompleteP5,000,0001,600,0002017P3,000,00020183,500,0001,700,0002019Under the percentage-of-completion method of recognizing revenue,

Answered: That was the total estimated gross…

That was the total estimated gross profit recognized or realized as of December 31, 2018? What was the estimated gross profit (loss) recognized or realized for the year ended December 31, 2019?

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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Question

That was the total estimated gross profit recognized or realized as of December 31, 2018?

What was the estimated gross profit (loss) recognized or realized for the year ended December 31, 2019?

RAMOS BUILDERS, Inc. entered into a P10,000,000 contract to construct a multi-purpose recreational facility.
The estimated cost to complete the project was P8,000,000 and the contract period was 36 months starting
January 1, 2017. The company uses the cost-to-cost method of estimating earnings. On January 1, 2018, the
contract price was reduced to P9,500,000 due to the many changes made to the original contract. The
accounting records relating to this contact for the years 2017 to 2019 disclosed the following:
Progress Billings
P2,800,000
4,000,000
2,700,000
Actual Cost Current Year
Estimated Cost to Complete
P5,000,000
1,600,000
2017
P3,000,000
2018
3,500,000
1,700,000
2019
Under the percentage-of-completion method of recognizing revenue,

Definition Definition Amount earned or lost on the sale of one or more items is referred to as the profit or loss on that item

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