Brainy Company started the construction of a building for a customer at a fixed contract price of P2,000,000 on January 1, 2019. On the same date, the customer paid a mobilization fee equal to 5% of contract price that will be deductible from the first billing. The outcome of construction contract can be estimated reliably except in 2019 which is the start of the project. The company billed the customer equivalent to 30%, 20% and 40% of the contract price during 2019, 2020 and 2021, respectively. The remaining billing was made at the year of completion of the project. The company made collection from the customer at the end of 2019, 2020 and 2021, in the amount of P240,000, P900,000 and P360,000, respectively. Direct costs related to the said project (see image below). 1. What is the Percentage of completion in 2020? 2. How much is the Construction Revenue to be recognized in 2020? 3. How much is the Gross Income (Loss) to be recognized in 2021? 4. How much is the balance of Account Receivable at December 31, 2021? 5. How much is the Contract Asset/Liability at December 31, 2021?
Brainy Company started the construction of a building for a customer at a fixed contract price of P2,000,000 on January 1, 2019. On the same date, the customer paid a mobilization fee equal to 5% of contract price that will be deductible from the first billing. The outcome of construction contract can be estimated reliably except in 2019 which is the start of the project. The company billed the customer equivalent to 30%, 20% and 40% of the contract price during 2019, 2020 and 2021, respectively. The remaining billing was made at the year of completion of the project. The company made collection from the customer at the end of 2019, 2020 and 2021, in the amount of P240,000, P900,000 and P360,000, respectively. Direct costs related to the said project (see image below).
1. What is the Percentage of completion in 2020?
2. How much is the Construction Revenue to be recognized in 2020?
3. How much is the Gross Income (Loss) to be recognized in 2021?
4. How much is the balance of Account Receivable at December 31, 2021?
5. How much is the Contract Asset/Liability at December 31, 2021?
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How about these questions:
1. How much is the balance of Account Receivable at December 31, 2021?
2. How much is the Contract Asset/Liability at December 31, 2021?
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