2. On January 1, 2020, an entity entered into a long-term construction contract with fixed contract price of P5,000,000. The entity billed its client as follows: 30% during 2020, 40% during 2021 and the remainder at the year of project completion. The following data were provided by the cost accountant of the entity: 2020 2021 2022 Cumulative Cost incurred as of the end of the year P2,200,000 P3,600,000 P4,800,000 Estimated remaining cost to complete at the end of the P3,300,000 P900,000 year
2. On January 1, 2020, an entity entered into a long-term construction contract with fixed contract price of P5,000,000. The entity billed its client as follows: 30% during 2020, 40% during 2021 and the remainder at the year of project completion. The following data were provided by the cost accountant of the entity: 2020 2021 2022 Cumulative Cost incurred as of the end of the year P2,200,000 P3,600,000 P4,800,000 Estimated remaining cost to complete at the end of the P3,300,000 P900,000 year
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter17: Advanced Issues In Revenue Recognition
Section: Chapter Questions
Problem 6P
Related questions
Question
Question: Assume that an architect hired by the company made the following estimates of the project’s percentage of completion at 50%, 90% and 100% at the end of 2020,2021, and 2022, respectively, what is the realized gross profit for 2021, using percentage of completion method – output measures as determined by estimates made by the architect?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Financial Reporting, Financial Statement Analysis…
Finance
ISBN:
9781285190907
Author:
James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Financial Reporting, Financial Statement Analysis…
Finance
ISBN:
9781285190907
Author:
James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:
Cengage Learning
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT