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
Problem 9MC
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Question
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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