24 On January 1, 2016, AVIDA was contracted to construct a townhouse for SM Corp. for a total contract price of P50,400,000. The building was completed by November 31, 2018. The following are the data of AVIDA: 2016 2017 2018 Contract cost incurred during the year 19,200,000 15,600,000 8,700,000 Estimated cost at completion 38,400,000 43,500,000 43,500,000 Billing during the year 19,200,000 21,000,000 10,200,000 The entry to record the recognized profit in 2018 includes credit to Group of answer choices CIP 50,400,000 Contract cost 8,700,000 Contract revenue 10,080,000 CIP 1,380,000

24 On January 1, 2016, AVIDA was contracted to construct a townhouse for SM Corp. for a total contract price of P50,400,000. The building was completed by November 31, 2018. The following are the data of AVIDA: 2016 2017 2018 Contract cost incurred during the year 19,200,000 15,600,000 8,700,000 Estimated cost at completion 38,400,000 43,500,000 43,500,000 Billing during the year 19,200,000 21,000,000 10,200,000 The entry to record the recognized profit in 2018 includes credit to Group of answer choices CIP 50,400,000 Contract cost 8,700,000 Contract revenue 10,080,000 CIP 1,380,000

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 9MC

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55 On March 1, 2022, ABC Co. was contracted to construct a building for a customer at a total contract price of P16,500,000. The building was estimated to be completed in 2024. The following data were made available: 2022 2023 2024 Contract costs incurred P6,400,000 P5,200,000 P2,900,000 Estimated costs to complete 6,400,000 2,900,000 - Progress billings each year 6,400,000 7,000,000 3,100,000 How much is the realized gross profit for 2024?
36 Construction is constructing an office building under contract for Election Cafe. The contract calls for progress billings and payments of P620,000 each quarter. The total contract price is P7,440,000 and RegisterToVote estimates total costs of P7,100,000. RegisterToVote estimates that the building will take 3 years to complete, and commences construction on January 2, 2020. 36 At December 31, 2020, RegisterToVote estimates that it is 30% complete with the construction, based on costs incurred. What is the total amount of Revenue from Long-Term Contracts recognized for 2020 and what is the balance in the Accounts Receivable account assuming Election Cafe has not yet made its last quarterly payment? Revenue - 2,232,000 ; AR - 620,000 Revenue - 2,130,000 ; AR - 620,000 Revenue - 2,130,000 ; AR - 2,480,000 Revenue - 2,480,000 ; AR - 2,480,000 37At December 31, 2021, RegisterToVote Construction estimates that it is 75% complete with the building; however, the estimate of total costs…
42. ABC, Inc. works on a P5,250,000 contract in 2022 to construct an office building. During 2022, ABC, Inc. uses the cost to cost method. At December 31, 2022, the balances in certain accounts were: Construction in progress – P1,890,000; accounts receivable – P180,000; and billings on construction in process – P900,000; contract retention – P90,000; mobilization fee – P70,000. At December 31,2022, the estimated costs to completion are P2,352,000. How much is the realized gross profit in 2022?
On July 1, 2016, ABC Construction Corp. contracted to build an office building for XYZ, Inc. fora total price of P975,000. 2016 2017 2018Contract cost incurred to date 75,000 600,000 1,050,000Estimated costs to complete the contract 675,000 400,000 -Billings to XYZ, Inc. 150,000 550,000 275,0001. Under the percentage of completion method, how much is the Construction-in-Progressat December 31,2017?2. Under the zero-profit method, how much is the Construction-in-Progress, net of ProgressBillings at December 31, 2017?3. Under the percentage of completion method, how much is the realized gross profit/ (loss)at December 31, 2018?
On February 1, 2014, Marsh Contractors agreed to construct a building at a contract price of $5,800,000. Marsh estimated total construction costs would be $4,000,000 and the project would be finished in 2016. Information relating to the costs and billings for this contract is as follows: 2014 2015 2016 Total costs incurred to date $1,500,000 $2,640,000 $4,600,000 Estimated costs to complete 2,500,000 1,760,000 -0- Customer billings to date 2,200,000 4,000,000 5,600,000 Collections to date 2,000,000 3,500,000 5,500,000 Instructions Fill in the correct amounts on the following schedule. Part A:…
43. On February 20, 2022, ABC Construction Company entered into a fixed-price contract to construct a commercial building for P9,000,000. ABC determined that the performance obligation is satisfied over time. Information relating to the contract is as follows: 2022 2023 Percentage of completion 25% 75% Estimated costs at completion P6,750,000 P7,200,000 How much is the contract costs charged to profit or loss in 2022?
41. On February 20, 2022, ABC Construction Company entered into a fixed-price contract to construct a commercial building for P9,000,000. ABC determined that the performance obligation is satisfied over time. Information relating to the contract is as follows: 2022 2023 Percentage of completion 25% 75% Estimated costs at completion P6,750,000 P7,200,000 How much is the gross profit to be recognized in 2023?
56 On February 20, 2022, ABC Construction Company entered into a fixed-price contract to construct a commercial building for P9,000,000. ABC determined that the performance obligation is satisfied over time. Information relating to the contract is as follows: 2022 2023 Percentage of completion 25% 75% Estimated costs at completion P6,750,000 P7,200,000 How much is the contract costs charged to profit or loss in 2022? On February 20, 2022, ABC Construction Company entered into a fixed-price contract to construct a commercial building for P9,000,000. ABC determined that the performance obligation is satisfied over time. Information relating to the contract is as follows: 2022 2023 Percentage of completion 25% 75% Estimated costs at completion P6,750,000 P7,200,000 How much is the contract costs charged to profit or loss in 2022?
Santiago builders began construction work in 2021 for a project with contract price of P24,000,000. Santiago Builders uses percentage of completion. The financial statements for 2021 relating to the contract show the following: Accounts receivable. P 1,500,000 Construction in progress. 4,800,000 Contract billings to date. 4,500,000 Realized gross profit in 2021. 600,000 1.Compute the total cost incurred to date A.4,200,000. C. 5,400,000 B.4,800,000. D. 5,100,000 2.Compute the cash collection during 2021 A.3,000,000. C. 2,100,000 B.4,200,000. D. 3,900,000
M6-16 Using Percentage-of-Completion and Completed Contract Methods Halsey Building Company signed a contract to build an ofﬁce building for $40,000,000. The scheduled construction costs follow. Year Cost 2016. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 9,000,000 2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $15,000,000 2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,000,000 Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $30,000,000 The building is completed in 2018.For each year, compute the revenue, expense, and gross proﬁt reported for this construction project using each of the…
M6-16 Using Percentage-of-Completion and Completed Contract Methods Halsey Building Company signed a contract to build an ofﬁce building for $40,000,000. The scheduled construction costs follow. Year Cost 2016. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 9,000,000 2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $15,000,000 2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,000,000 Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $30,000,000 The building is completed in 2018.For each year, compute the revenue, expense, and gross proﬁt reported for this construction project using each of the…
In 2016, Omega Construction began work on a contract with a price of $850,000 and estimated costs of $595,000. Data for each year of the contract are as follows: 2016 2017 2018 Costs incurred during the year $238,000 $319,600 $105,000 Estimated costs to complete 357,000 139,400 -0- Partial billings 260,000 210,000 380,000 Collections 240,000 200,000 410,000 Refer to Exhibit 17-2. Assuming the performance obligation is satisfied over time, what would be the gross profit in 2016? $255,000 $260,000 $102,000 $425,000

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	2016	2017	2018
Contract cost incurred during the year	19,200,000	15,600,000	8,700,000
Estimated cost at completion	38,400,000	43,500,000	43,500,000
Billing during the year	19,200,000	21,000,000	10,200,000