The loss that Creative Construction Company should have recognized in 2019 is

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
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Creative Construction Company has consistently used the percentage of completion method of recognizing revenue. During 2019, Creative started work on a P15M fixed price construction contract. The accounting records disclosed the following data for the year ended December 31, 2019.

Contract Costs incurred

P4,650,000

Estimated costs to complete

P10,850,000

Progress Billings

15,500,000

Collections

P3,500,000

15. The loss that Creative Construction Company should have recognized in 2019 is

a. P150,000

b. P500,000

C. P350,000

d P1,150,000

 

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