The following are taken from the records of Peter Construction Company, which started a two-year project in 2018: Contract Price Costs incurred in 2018 Estimated costs to complete Billings to client Collections Project 2 P3,000,000 2,800,000 400,000 2,700,000 2,500,000 1. If Peter Construction Company used the input method, what amount of gross profit (loss) should be reported in its 2018 income statement?

The following are taken from the records of Peter Construction Company, which started a two-year project in 2018: Contract Price Costs incurred in 2018 Estimated costs to complete Billings to client Collections Project 2 P3,000,000 2,800,000 400,000 2,700,000 2,500,000 1. If Peter Construction Company used the input method, what amount of gross profit (loss) should be reported in its 2018 income statement?

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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Concept explainers

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.

Question

The following are taken from the records of Peter Construction Company, which
started a two-year project in 2018:
Project 2
P3,000,000
2,800,000
400,000
2,700,000
2,500,000
Contract Price
Costs incurred in 2018
Estimated costs to complete
Billings to client
Collections
1. If Peter Construction Company used the input method, what amount of gross profit
(loss) should be reported in its 2018 income statement?
(P175,000)
b.
a.
(P200,000)
с.
(P300,000)
d.
Not given

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