Problem 3: Roman Construction Company (RCC) agrees to build a large office building for Carmen Towers for a total contract price of P5,000,000. The contract is signed on October 1, 2019 and RCC's year end is December 31. The total anticipated costs at October 1, 2019 is P4,500,000. Below gives further information about the contract: 2019 2020 2021 Total Cost incurred each year Estimated cost to complete at year end Progress billing Progress payments 1,350,000 2,250,000 400,000 4,000,000 3,150,000 400,000 275,000 2,100,000 400,000 2,000,000 2,600,000 5,000,000 2,625,000 5,000,000 Requirement: a. Compute for the gross profit / loss each year. b. Compute for the construction revenue for each year. C. Journal entries for 2019, 2020 and 2021, under the traditional accounting and under PFRS 15. d. Show all computations in good form.
Problem 3: Roman Construction Company (RCC) agrees to build a large office building for Carmen Towers for a total contract price of P5,000,000. The contract is signed on October 1, 2019 and RCC's year end is December 31. The total anticipated costs at October 1, 2019 is P4,500,000. Below gives further information about the contract: 2019 2020 2021 Total Cost incurred each year Estimated cost to complete at year end Progress billing Progress payments 1,350,000 2,250,000 400,000 4,000,000 3,150,000 400,000 275,000 2,100,000 400,000 2,000,000 2,600,000 5,000,000 2,625,000 5,000,000 Requirement: a. Compute for the gross profit / loss each year. b. Compute for the construction revenue for each year. C. Journal entries for 2019, 2020 and 2021, under the traditional accounting and under PFRS 15. d. Show all computations in good form.
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 5MC
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Transcribed Image Text:Problem 3: Roman Construction Company (RCC) agrees to build a large office building
for Carmen Towers for a total contract price of P5,000,000. The contract is signed on
October 1, 2019 and RCC's year end is December 31. The total anticipated costs at
October 1, 2019 is P4,500,000. Below gives further information about the contract:
Total
4,000,000
2019
2020
2021
Cost incurred each year
Estimated cost to complete
at year end
Progress billing
Progress payments
1,350,000 2,250,000
400,000
3,150,000
400,000
275,000 2,100,000
400,000
2,000,000
2,600,000
2,625,000
5,000,000
5,000,000
Requirement: a. Compute for the gross profit / loss each year.
b. Compute for the construction revenue for each year.
c. Journal entries for 2019, 2020 and 2021, under the traditional
accounting and under PFRS 15.
d. Show all computations in good form.
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