On January 1, 20x1, Agatha Company entered into a long-term construction contract with a fixed contract price of P2,250,000. The construction started on July 1, 20x1, and ended on October 31, 20x3. The chief accountant of Agatha provided the following costs: 20x2 P500,000 P1,832,000 P2,278,125 820,125 20x1 20x3 Contract costs incurred to date Estimated costs to complete at the end of the year 1,500,000 REQUIRED: Assuming the outcome of the construction can be estimated reliably, and the company decided to employ cost-to-cost method, compute the following: 5. Realized gross profit (loss) for the year ended December 31, 20x1 6. Percentage of completion for 20x2 7. Anticipated loss

On January 1, 20x1, Agatha Company entered into a long-term construction contract with a fixed contract price of P2,250,000. The construction started on July 1, 20x1, and ended on October 31, 20x3. The chief accountant of Agatha provided the following costs: 20x2 P500,000 P1,832,000 P2,278,125 820,125 20x1 20x3 Contract costs incurred to date Estimated costs to complete at the end of the year 1,500,000 REQUIRED: Assuming the outcome of the construction can be estimated reliably, and the company decided to employ cost-to-cost method, compute the following: 5. Realized gross profit (loss) for the year ended December 31, 20x1 6. Percentage of completion for 20x2 7. Anticipated loss

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 26E

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