That was the total estimated gross profit recognized or realized as of December 31, 2018? What was the estimated gross profit (loss) recognized or realized for the year ended December 31, 2019?
That was the total estimated gross profit recognized or realized as of December 31, 2018? What was the estimated gross profit (loss) recognized or realized 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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That was the total estimated gross profit recognized or realized as of December 31, 2018?
What was the estimated gross
Transcribed Image Text:RAMOS BUILDERS, Inc. entered into a P10,000,000 contract to construct a multi-purpose recreational facility.
The estimated cost to complete the project was P8,000,000 and the contract period was 36 months starting
January 1, 2017. The company uses the cost-to-cost method of estimating earnings. On January 1, 2018, the
contract price was reduced to P9,500,000 due to the many changes made to the original contract. The
accounting records relating to this contact for the years 2017 to 2019 disclosed the following:
Progress Billings
P2,800,000
4,000,000
2,700,000
Actual Cost Current Year
Estimated Cost to Complete
P5,000,000
1,600,000
2017
P3,000,000
2018
3,500,000
1,700,000
2019
Under the percentage-of-completion method of recognizing revenue,
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