On January 1, 2021. Robredo Co. started the construction of a building with a fixed contract price of P10,000,000. The outcome of the construction project can be estimated reliably and the contractor decided to employ cost to cost method. The following data are provided by the accountant and project manager concerning the construction costs for the three years of construction: Year Costs incurred during the year Realized gross profit/(loss) during the year Percentage of completion as of the end of the year 12/31/2021 12/31/2022 12/31/2023 ? ? P 3740000 P750,000 (P250,000) (P800,000) 50% 37.5% ? What is the balance of Construction in Progress on December 31, 2023?
On January 1, 2021. Robredo Co. started the construction of a building with a fixed contract price of P10,000,000. The outcome of the construction project can be estimated reliably and the contractor decided to employ cost to cost method. The following data are provided by the accountant and project manager concerning the construction costs for the three years of construction: Year Costs incurred during the year Realized gross profit/(loss) during the year Percentage of completion as of the end of the year 12/31/2021 12/31/2022 12/31/2023 ? ? P 3740000 P750,000 (P250,000) (P800,000) 50% 37.5% ? What is the balance of Construction in Progress on December 31, 2023?
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 18RE
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Transcribed Image Text:On January 1, 2021. Robredo Co. started the construction of a building with a fixed contract price of
P10,000,000. The outcome of the construction project can be estimated reliably and the contractor decided
to employ cost to cost method. The following data are provided by the accountant and project manager
concerning the construction costs for the three years of construction:
Year
12/31/2021 12/31/2022 12/31/2023
P 3740000
Costs incurred during the year
Realized gross profit/(loss) during the year
Percentage of completion as of the end of the year
?
?
P750,000 (P250,000) (P800,000)
50%
37.5%
?
What is the balance of Construction in Progress on December 31, 2023?
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