Problem 2. The Jay-R Construction Corporation uses the percentage of completion method of recognizing income from long-term construction contracts. In 2018, Anthonette entered into a fixed price contract to construct a bridge for P 30,000,000. Estimated cost to complete the construction and contract costs incurred up to 2020 were as follows: Cumulative Contract Costs Estimated cost to Incurred Complete P 2,000, 000 P 16, 000, 000 As of Dec 31, 2018 As of Dec 31, 2019 As of Dec 31, 2020 11, 000, 000 5, 000, 000 11, 000, 000 20, 000, 000 1. What is the estimated percentage of completion as of December 31, 2020? 2. How much income should Jay-R Construction recognize on the above contract for the year ended December 31, 2019?
Problem 2. The Jay-R Construction Corporation uses the percentage of completion method of recognizing income from long-term construction contracts. In 2018, Anthonette entered into a fixed price contract to construct a bridge for P 30,000,000. Estimated cost to complete the construction and contract costs incurred up to 2020 were as follows: Cumulative Contract Costs Estimated cost to Incurred Complete P 2,000, 000 P 16, 000, 000 As of Dec 31, 2018 As of Dec 31, 2019 As of Dec 31, 2020 11, 000, 000 5, 000, 000 11, 000, 000 20, 000, 000 1. What is the estimated percentage of completion as of December 31, 2020? 2. How much income should Jay-R Construction recognize on the above contract for the year ended December 31, 2019?
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 9MC
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Transcribed Image Text:Problem 2.
The Jay-R Construction Corporation uses the percentage of completion method of recognizing income from long-term construction contracts. In
2018, Anthonette entered into a fixed price contract to construct a bridge for P 30,000,000. Estimated cost to complete the construction and
contract costs incurred up to 2020 were as follows:
Cumulative
Contract Costs
Estimated cost to
Incurred
Complete
As of Dec 31, 2018
As of Dec 31, 2019
As of Dec 31, 2020
P 2,000, 000
11, 000, 000
P 16, 000, 000
11, 000, 000
20, 000, 000
5, 000, 000
What is the estimated percentage of completion as of December 31, 2020?
How much income should Jay-R Construction recognize on the above contract for the year ended December 31, 2019?
1.
2.
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