Ramos, Inc. began work in 2017 on contract #3814. The contract price is $7,200,000. The contract is expected to be completed in 2018. Other details follow: Costs incurred during the year Estimated costs to complete, as of December 31 Billings during the year Collections during the year 2017 $1,200,000 3,600,000 1,350,000 900,000 2018 $3,675,000 0. 5,400,000 5,850,000 Assume that Ramos uses the percentage-of-completion method of accounting and has fiscal years ending on December 31. 1. The portion of the total gross profit to be recognized as income in 2017 is a. $450,000. b. $600,000. c. $1,800,000. d. $2,400,000.
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- Triple Take Construction Co, began construction of a project in 2017 for a contract price of P9,600,000. The project is to be completed in 4 years or in the year 2021. The following are the details regarding the construction project. 2018 4,500,000 5,500,000 4,320,000 3,240,000 2019 7,520,000 1,880,000 7,680,000 5,760,000 2017 Costs Incurred to Date Estimated Costs to Complete Progress Billings to Date Cash Collection for the Year 2,160,000 6,840,000 | 2,304,000 1,728,000 How much is the gross profit/loss realized in 2018?On January 1, 2016, AVIDA was contracted to construct a townhouse for SM Corp. for a total contract price of P50,400,000. The building was completed by November 31, 2018. The following are the data of AVIDA: 2016 2017 2018 Contract cost incurred during the 19,200,000 15,600,000 8,700,000 year Estimated cost at completion 38,400,000 43,500,000 43,500,000 Billing during the year 19,200,000 21,000,000 10,200,000 The entry to record the recognized profit in 2018 includes credit to O CIP 1,380,000 Contract revenue 10,080,000 O CIP 50,400,000 Contract cost 8,700,000During 2016, Green Love Company started a construction work with a contract price of $4,500,000,000. The work was completed in 2018. The following information is available on picture below. (a) Compute the application of the percentage of completion method on a cost to cost basis. (b) Calculate the amount of revenue and gross profit to be recognized annually using the percentage of completion and cost-recovery methods.
- On February 1, 2014, Marsh Contractors agreed to construct a building at a contract price of $5,800,000. Marsh estimated total construction costs would be $4,000,000 and the project would be finished in 2016. Information relating to the costs and billings for this contract is as follows: 2014 2015 2016 Total costs incurred to date $1,500,000 $2,640,000 $4,600,000 Estimated costs to complete 2,500,000 1,760,000 -0- Customer billings to date 2,200,000 4,000,000 5,600,000 Collections to date 2,000,000 3,500,000 5,500,000 Instructions Fill in the correct amounts on the following schedule. Part A:…On January 1, 2016, AVIDA was contracted to construct a townhouse for SM Corp. for a total contract price of P50,400,000. The building was completed by November 31, 2018. The following are the data of AVIDA: 2017 2018 Contract cost incurred during the year 19,200,000 15,600,000 8,700,000 Estimated cost at completion 38,400,000 43,500,000 43,500,000 Billing during the year 19,200,000 21,000,000 10,200,000 The entry to record the recognized profit in 2018 includes credit to Contract cost 8,700,000 CIP 50,400,000 CIP 1,380,000 Contract revenue 10,080,000SMC entered into a long-term construction contract for 3 years. Contract price agreed was P4,150,000. The outcome of the contract was estimated reliably. The following data were ascertained for the contract: December 31, 2017 December 31, 2018Percentage of completion 30% 82.5%Estimated cost to complete 1,960,000 840,000 1. What is the total cost incurred in year 2018?A. 4,073,750 C. 1,680,000B. 840,000 D. 3,120,000 2. The realized gross profit (loss) in year 2018 isA. 650,000 C. (. 245,000)B. 405,000 D. (1,055,000) 3. What is the construction cost of sales for year 2018?A. 3,960,000 C. 3,233,750B. 3,120,000 D. 4,478,750 4. What is the construction-in-progress as of 2018?A. 3,423,750 C. 2,065,000B. 3,310,000 D. 2,470,000
- SMC entered into a long-term construction contract for 3 years. Contract price agreed was P4,150,000. The outcome of the contract was estimated reliably. The following data were ascertained for the contract: December 31, 2017 December 31, 2018Percentage of completion 30% 82.5%Estimated cost to complete 1,960,000 840,000 What is the construction cost of sales for year 2018?A. 3,960,000 C. 3,233,750B. 3,120,000 D. 4,478,750Sheridan Construction Co. uses the percentage-of-completion method. In 2024, Sheridan began work on a contract for $21300000; it was completed in 2025. The following cost data pertain to this contract: Cost incurred during the year Estimated costs to complete at the end of year Year Ended December 31 $8516000. $2990000. $3680000. $3684000. 2024 $7254000 4836000 2025 $5530000 The amount of gross profit to be recognized on the income statement for the year ended December 31, 2025 isDuring 2009, Mason Construction, Inc. started work on a P 5,200,000 fixed-price construction contract to be completed in two years. The accounting records disclosed the following data for the year ended December 31, 2009: Cost incurred P 2,650,000Estimated cost to complete 2,720,000Progress billings 2,500,000Collections 2,000,000What amount of net income or loss should have been recognized in 2009? On May 1, 2010, Jollibee Inc., a franchisor, entered into a franchise agreement with Session Delights, a franchisee. The total franchise fees agreed upon is P11,900,000 of which P5,000,000 is payable upon signing and the balance payable in three annual payments. It was agreed that the down-payment is nonrefundable, not withstanding the lack of substantial performance of services by franchisor. What amount of deferred revenue should be reported in the May 1, 2010 financial statements of Jollibee Inc.?
- Deen Construction began a construction project in 2018. The contract price was $1,250,000, and theestimated costs were $1,000,000. Data for each year of the contract are as follows:2018 2019 2020Costs incurred during the year $250,000 $600,000 $190,000Estimated costs to complete 750,000 212,500 -0-Partial billings 375,000 500,000 375,000Collections 187,500 469,000 593,500Instructions:1. Assuming Deen the percentage of completion method:(a) Prepare a schedule that computes the gross profit for 2018 - 2020(b) Determine the net amount for construction in progress inventory should be reported on the2018 balance sheet.(c) Prepare all the necessary journal entries for 20192. Compute the amount of gross profit to be recognized each year, assuming the completed contractmethod is used.How much is the Gross Profit/Loss Realized in 2018? PAPASA Co. has consistently used the percentage of completion to account for its construction projects. On January 31, 2017, the company began work on a P4,500,000 construction contract. At the inception date, the estimated cost of the construction was P3,375,000. The following relates to the project Gross Profit- 2017 450,000 Cost incurred to date- 2018 2,700,000 Estimated cost to complete- 2018 900,000 Progress billings 2018 3,500,000Tigasin Builders Company began its construction activities in 2017. At the end of its first year's operation, the following projects (and other relevant information) are still uncompleted: Collections thru 12/31 Project Contract Actual costs Est cost to Billings thru 12/31 Price thru 12/31 Complete, 12/31 Angeles City 15,000,000 Palo City 10,000,000 5,500,000 9,000,000 5,250,000 12,400,000 3,390,000 3,100,000 13,560,000 17,500,000 Tigasin Builders will use the cost-to-cost percentage of completion in accounting for the Angeles City project, while the cost recovery method will be used for the Palo City project. 1. Compute the Construction Revenue to be recognized by Tigasin Builders for the Angeles City project in 2017. 2. Determine how (1) the Angeles City Project and (2) the Palo City Project will be shown on the year-end balance sheet.