Love Company entered into a contract to construct a 10-storey building for P8,000,000. The following data were taken from the company’s files (see image below).1.What is the Percentage of completion in 2019?2.Using the same information above, how much is the cost incurred in 2019?3.Using the same information above, how much is the revenue to be recognized in 2020?4.Using the same information above, how much is the balance of the Construction in Progress at December 31, 2020?5. Using the same information above, how much is the income to be recognized in 2020?

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Contract Costing

Contract costing is about tracing particular costs related to a particular contract entered into with the customer. It is one of the forms of job order costing. It is useful in long-term contracts at the most. It is seen that substantial time is required for the completion of the contract which takes different accounting periods. Thus, it is very much helpful for recognizing the costs associated with it and accounting in their specific accounting periods.