20x420x5Cost incurred during the yearEstimated costs to completeBillings during the year...Cash collections during the year.P1,300,000.P1,500,0001,200,0001,200,0001,000,C001,300,0001,500,000Required:1. Prepare the journal entries, under:a. Percentage of completion (over time) method using cost-to-cost methodb. Cost recovery method (also known as zero-profit approach) or point in time2. Compute the due from/to customers:a. Percentage of completion (over time) method using cost-to-cost methodb. Cost recovery method (also known as zero-profit approach) or point in time3. Compute the gross profit (loss)a. Percentage of completion (over time) method using cost-to-cost methodb. Cost recovery method (also known as zero-profit approach) or point in timeIY - Inc omplete Data:. Vul - Methods of Construction Accounting-Unprofitable Contract (Estimated Gross Loss)Cembs Contractors received a contract to construct a mental health facility for P2,500,000.Construction was begun in 20x4 and completed in 20x5. Cost and other data are presentedBARSbelow:

It is the first step to record the transactions that have dual effects ie. debit and credit effect.…

VII - Methods of Construction Accounting-Unprofitable Contract (Estimated Gross Loss) ambs Contractors received a contract to construct a mental health facility for P2,500,000. Construction was begun in 20x4 and completed in 20x5. Cost and other data are presented below:

VII - Methods of Construction Accounting-Unprofitable Contract (Estimated Gross Loss) ambs Contractors received a contract to construct a mental health facility for P2,500,000. Construction was begun in 20x4 and completed in 20x5. Cost and other data are presented below:

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

20x4
20x5
Cost incurred during the year
Estimated costs to complete
Billings during the year...
Cash collections during the year.
P1,300,000.
P1,500,000
1,200,000
1,200,000
1,000,C00
1,300,000
1,500,000
Required:
1. Prepare the journal entries, under:
a. Percentage of completion (over time) method using cost-to-cost method
b. Cost recovery method (also known as zero-profit approach) or point in time
2. Compute the due from/to customers:
a. Percentage of completion (over time) method using cost-to-cost method
b. Cost recovery method (also known as zero-profit approach) or point in time
3. Compute the gross profit (loss)
a. Percentage of completion (over time) method using cost-to-cost method
b. Cost recovery method (also known as zero-profit approach) or point in time
IY - Inc omplete Data:.

Vul - Methods of Construction Accounting-Unprofitable Contract (Estimated Gross Loss)
Cembs Contractors received a contract to construct a mental health facility for P2,500,000.
Construction was begun in 20x4 and completed in 20x5. Cost and other data are presented
BARS
below:

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Meaning of Journal entries:

VIEW

Journal entries under percentage of completion method:

VIEW

Journal entries under Cost recovery Method:

VIEW

Calculation under percentage of completion method:

VIEW

Calculation under Cost recovery Method:

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