Eminem Company recognized gross profit of P720,000 on its long-term project which has accumulated costs of P2,880,000. To finish the project, the company estimates that it has to incur additional costs of P1,920,000. Determine the contract price.
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Eminem Company recognized gross profit of P720,000 on its long-term project which has accumulated costs of P2,880,000. To finish the project, the company estimates that it has to incur additional costs of P1,920,000.
Determine the contract price.
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- On March 1, 2019, Elkhart enters into a new contract to build a specialized warehouse for 7 million. The promise to transfer the warehouse is determined to be a performance obligation. The contract states that if the warehouse is usable by November 30, 2019, Elkhart will receive a bonus of 600,000. For every week after November 30 that the warehouse is not usable, the bonus will decrease by 150,000. Elkhart provides the following completion schedule: Required: 1. Assume that Elkhart uses the expected value approach. What amount should Elkhart use for the transaction price? 2. Assume that Elkhart uses the most likely amount approach. What amount should Elkhart use for the transaction price? 3. Next Level What is the purpose of assessing whether a constraint on the variable consideration exists?Batanes Construction Company recognized gross loss of P42,000 on its long-term project which has accumulated costs of P490,000. To finish the project, the company estimates that it must incur additional cost of P735,000. The contract price is:* a. P798,000 b. P1,330,000 c. P1,225,000 d. P1,183,000Excess Construction Corp. has a $16 million contract to construct a building. The company estimates $10.4 million in costs to construct the building and an expected gross profit of $5.6 million. During the current year, the company incurred $3,120,000 of costs on the contract. Under the percentage-of-completion method, how much will Excess Construction Corp. report as revenue in the current year?
- A construction company entered into a fixed-price contract to build an office building for $20 million. Construction costs incurred during the first year were $6 million and estimated costs to complete at the end of the yearwere $9 million. The building was completed during the second year. Construction costs incurred during the second year were $10 million. How much revenue, cost, and gross profit will the company recognize in the firstand second year of the contract applying the cost recovery method that is required by IFRS?Tullis Construction enters into a long-term fixed price contract to build an office tower for $10,200,000. In the first year of the contract Tullis incurs $3,000,000 of cost and the engineers determined that the remaining costs to complete the project are $5,000,000. Tullis billed $4,000,000 in year 1 and collected $3,200,000 by the end of the end of the year. How should Tullis report Construction in Progress and Billings on Construction in Progress at the end of year 1 on the balance sheet assuming the use of the completed-contract method?At year-end XYZ Company has an in-process construction project with costs totaling $10,000,000. It has billed $8,000,000 on these projects and collected $6,500,000. As it employs the percentage-of-completion method it has also recognized a total of $1,000,000 in profit to date on these contracts. The XYZ balance sheet would report: Selected Answer: Incorrect Asset values totaling $1,500,000 for these projects. Answers: Correct Asset values totaling $4,500,000 for these projects. Asset values totaling $3,500,000 for these projects. Asset values totaling $1,500,000 for these projects. Liabilities values totaling $1,000,000 for these projects.
- The Naples Company uses the percentage-of-completion method and the cost-to-cost method for its long-te construction contracts. On one such contract, Naples expects total revenues of 260,000 and total costs of 200,000. During the first year, Naples incurred costs of 50,000 and billed the customer 30,000 under the contract. At what net amount should Naple's Construction in Progress for this contract be reported at the end of the first year?Shumpert, Inc., entered into a contract that was to take two years to complete, with an estimated cost of $ 1,348,800. The contract price was $1,888,320. Costs of the contract for 2022, the first year, totaled $1,011, 600. If required, round any division to two decimal places and round your final answers to the nearest dollar. a. What was the gross profit reported by the percentage of completion method for 2022? Sfill in the blank 1 b. After the contract was completed at the end of 2023 at a total cost of $1,416, 240, what was the gross profit reported by the percentage of completion method for 2023? Sfill in the blank 2Franklin Construction entered into a fixed-price contract to build a freeway-connecting ramp for $30 million. Construction costs incurred in the first year were $16 million and estimated remaining costs to complete at the end of the year were $17 million. How much gross profit or loss will Franklin recognize in the first year if it recognizes revenue over time according to percentage of completion? What if instead Franklin recognizes revenue upon contract completion?
- Tyro Construction Company has two projects, for which it reported, as of December 31, 20x5, the following information: In thousand pesos: Project A Project B Contract Price P 4,800 860 20x4: Costs incurred P 3,400 Percent completed 75% 20x5: Costs incurred P 1,250 140 Percent Completed 25% 15% Using the percentage-of-completion (over time) method of revenue recognition, gross profit on Project A to be recognized in 20x4 would be: a. P 200,000 ] b. P 300,000Chan Builders Inc entered into a contract with George Company to construct a production plant. At that time, Chan Builders estimated that it would take five years to complete the facility at a total cost of P28,800,000. Chan Builders therefore, pegged the total contract price for the construction of the facility at P34,800,000. During 2010, Chan Builders incurred P7,500,000 in construction costs related to the project. Because of rising material and labor costs, the estimated cost to complete the contract at the end of 2010 amounted to P22,500,000. George was billed and paid 30% on the contract price in accordance with the contract agreement. Compute the Contract Asset (Contract Liability) for 2010. George Co. enters into a contract to build an apartment for Jungle Co. for a fixed fee of ₱20,000,000. At contract inception, George Co. assesses its performance obligations in the contract and concludes that it has a single performance obligation that is satisfied over time. George…The Naples Company uses the overtime/percentage-of-completion method and the point in- time/cost-to-cost method for its long-term construction contracts. On one such contract, Naples expects total revenues of P260,000 and total costs of P200,000. During the first year, Naples incurred costs of P50,000 and billed the customer P30,000 under the contract. At what net amount should Naples' Construction in Progress for this contract be reported at the end of the first year?
