You were engaged to audit the books of accounts of A. Bonifacio contractors which had a 3 year construction contract in 2020 for Php 900,000. A Bonifacio uses the percentage of completion method for financial statement purposes. Income to be recognized each year is based on the ratio of cost incurred to total estimated cost to complete the contract. Data on this contract follows: Accounts receivable construction contract billings Php 30,000 Construction in progress 93,750 Less: Amounts billed 84,375 10% retention Php 9,375 Net Income recognized in 2020 (before tax) Php 15,000 A. Bonifacio contractors maintains a separate bank account for each construction contract. Bank deposits to this contract amounted to Php 50,000 Required: 6. How much cash was collected on the contract that was not yet deposited as at December 31, 2020? Thank you
You were engaged to audit the books of accounts of A. Bonifacio contractors which had a 3 year construction contract in 2020 for Php 900,000. A Bonifacio uses the percentage of completion method for financial statement purposes. Income to be recognized each year is based on the ratio of cost incurred to total estimated cost to complete the contract. Data on this contract follows: Accounts receivable construction contract billings Php 30,000 Construction in progress 93,750 Less: Amounts billed 84,375 10% retention Php 9,375 Net Income recognized in 2020 (before tax) Php 15,000 A. Bonifacio contractors maintains a separate bank account for each construction contract. Bank deposits to this contract amounted to Php 50,000 Required: 6. How much cash was collected on the contract that was not yet deposited as at December 31, 2020? Thank you
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
You were engaged to audit the books of accounts of A. Bonifacio contractors which had a 3 year construction
contract in 2020 for Php 900,000. A Bonifacio uses the percentage of completion method for financial
statement purposes. Income to be recognized each year is based on the ratio of cost incurred to total
estimated cost to complete the contract. Data on this contract follows:
Accounts receivable construction contract billings Php 30,000
Construction in progress 93,750
Less: Amounts billed 84,375
10% retention Php 9,375
Net Income recognized in 2020 (before tax) Php 15,000
A. Bonifacio contractors maintains a separate bank account for each construction contract. Bank
deposits to this contract amounted to Php 50,000
Required:
6. How much cash was collected on the contract that was not yet deposited as at December 31, 2020?
Thank you
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