DM. Inc. worked on a P10,500,000 contract in 2016 to construct an office building. During 2016, DM. INc. uses the cost-to-cost method of computing percentage of completion. At December 31, 2016, the balance in certain accounts were as follows. How much is the realized gross profit in 2016? * • Construction in progress - P3,780,000 • Accounts receivable - P360,000 • Progress billings - P1.800,000 Contract retention - P180,000 Mobilization fee - P140,000 • At December 31, 2016, the estimated cost at completion is P7,350,000. O P1,102,500 O P1,062,500 O P1,242,500 O P1,134,000

DM. Inc. worked on a P10,500,000 contract in 2016 to construct an office building. During 2016, DM. INc. uses the cost-to-cost method of computing percentage of completion. At December 31, 2016, the balance in certain accounts were as follows. How much is the realized gross profit in 2016? * • Construction in progress - P3,780,000 • Accounts receivable - P360,000 • Progress billings - P1.800,000 Contract retention - P180,000 Mobilization fee - P140,000 • At December 31, 2016, the estimated cost at completion is P7,350,000. O P1,102,500 O P1,062,500 O P1,242,500 O P1,134,000

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter16: Accounting Periods And Methods

Section: Chapter Questions

Problem 40P

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During 2016, Green Love Company started a construction work with a contract price of $4,500,000,000. The work was completed in 2018. The following information is available on picture below. (a) Compute the application of the percentage of completion method on a cost to cost basis. (b) Calculate the amount of revenue and gross profit to be recognized annually using the percentage of completion and cost-recovery methods.
DM, Inc. works on a P10,500,000 contract in 2015 to construct an office building. During 2015, DM, Inc. uses thecost to cost method. At December 31, 2015, the balances in certain accounts were: Construction in Progress – P3,780,000;Accounts Receivable – P360,000; and Billings on Construction in process – P1,800,000; contract retention – P180,000;Mobilization fee – P140,000. At December 31, 2015, the estimated cost at completion is P7,350,000. Determine the realizedgross profit in 2015
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