How much revenue is recognized for the year?
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Construction Contract: Graded Question #1: George Co. enters into a contract to build an apartment for Jungle Co. for a fixed fee of P20,000,000. At contract inception, George Co. assesses its performance obligations in the contract and concludes that it has a single performance obligation that is satisfied over time. George Co. determines that the measure of progress best depicts its performance in the contract is input method based on costs incurred. George estimates that the total contract costs would amount to P16,000,000 over the construction period. George incurs contract costs of P2,000,000 during the year. How much revenue is recognized for the year?
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- George Co. enters into a contract to build an apartment for Jungle Co. For a fixed fee of P20,000,000. At contract inception, George Co. assesses its performance obligations in the contract and concludes that it has a single performance obligation that is satisfied over time. George Co. determines that the measure of progress that best depicts its performance in the contract is input method based on costs incurred. George estimates that the total contract costs would amount to P16,000.000 over the construction period. George incurs contract costs of P2,000,000 during the year. How much revenue is recognized for the year?In 20x1, ABC Co. enters into a contract to construct a building for a customer. ABC identifies its performance obligation to be satisfied over time. ABC measures its progress on the contract based on costs incurred. The contract price is P20,000,000. ABC has an unconditional right to all billings made in accordance with the billing schedule stated in the contract. Information on the construction is as follows: 20x1 20x2 20x3 Contract costs incurred per year Billings per year Collections on billings per year 1,920,000 3,000,000 5,650,000 3,850,000 8,160,000 7,320,000 10,000,000 500,000 6600,000 Estimated costs to complete (at each year-end) from the Student Ha8,840,000 1,720,000 ons, quizzes rection with any academic work, abetting of the same: 1st violation How much profit is recognized on the contract in 20x3?Zentric Garage Inc. enters into a contract to provide services totaling $78,000. The contract includes a potential performance bonus based on when Zentric Garage completes the services. Zentric Garage estimates the following scenarios for completion. (Click the icon to view the scenarios.) Determine the bonus using the most-likely-amount approach. Determine the bonus using the most-likely-amount approach under scenario 1. The bonus for this contract using the most-likely-amount approach under scenario 1 is $ Determine the bonus using the most-likely-amount approach under scenario 2. The bonus for this contract using the most-likely-amount approach under scenario 2 is $ Determine the bonus using the most-likely-amount approach under scenario 3. The bonus for this contract using the most-likely-amount approach under scenario 3 is $ Ente Scenarios Complete within 3 days 5 days 8 days Probability Bonus Scenario 1 Scenario 2 80% 47% 15% 38% 5% 15% $ 13,000 $ 8,000 $ 3,500 Print Done…
- In 20x1, ABC Co. enters into a contract to construct a building for a customer. ABC identifies its performance obligation to be satisfied over time. ABC measures its progress on the contract based on costs incurred. The contract price is P20,000,000. ABC has an unconditional right to all billings made in accordance with the billing schedule stated in the contract. Information on the construction is as follows: 20x1 20x2 20x3 Contract costs incurred per year Billings per year Collections on billings per year Estimated costs to 8,160,000 7,320,000 1,920,000 10,000,000 7,000,000 3,000,000 9,500,000 6,650,000 3,850,000 complete (at each year-end) 8,840,000 1,720,000 How much profit is recognized on the contract in 20x3?In 20x1, ABC Co. enters into a contract to construct a building for a customer. ABC identifies its performance obligation to be satisfied over time. ABC measures its progress on the contract based on costs incurred. The contract price is P20,000,000. ABC has an unconditional right to all billings made in accordance with the billing schedule stated in the contract. Information on the construction is as follows: 20x1 20x2 Contract costs incurred per year Billings per year Collections on billings 20x3 8,160,000 7,320,000 1,920,000 10,000,000 7,000,000 3,000,000 9,500,000 6,650,000 3,850,000 per year Estimated costs to 1911 complete (at each year-end)er from the Student Ha8,840,000 of 1,720,000 "Cheating during examinations, quizzes or plagiarism in connection with any academic work, abetting of the same: 1st violation- How much profit is recognized on the contract in 20x3? suspension with invalidation of grade; 3rd violation- suspension1. In 20x1, Electrified Construction Co. enters into a contract to construct a building for a customer. Electrified identifies its performance obligation to be satisfied over time. Electrified measures its progress on the contract based on costs incurred. The contract price is P20M. Electrified has an unconditional right to all billings made in accordance with the billing schedule stated in the contract. Information on the construction is as follows: 20x1 20x2 20x3 a. contract cost incurred per yr. 8,160,000 7,320,000 1,920,000 b. billings per year 10,000,000 7,000,000 3,000,000 c. collections on billings per year 9,500,000 6,650,000 3,850,000 d. estimated costs to complete 8,840,000 1,720,000 (at each yr. end) a. Compute for the gross profits, revenues and costs of construction in 20x1, 20x2 and 20x3, respectively. b. Provide the journal entries under (i) traditional accounting and (ii) PFRS…
- In 20x1, Silverchair Co., a construction company, enters into a contract with a customer for the construction of a building. The contract states a fixed fee of P8,700,000. Silverchair's performance obligation in the contract is satisfied over time. Silverchair uses the 'cost-to-cost method in measuring its progress in the contract. Information on the contract follows: 20x1 20x2 Estimated total costs at completion 6,525,000 6,960,000 Percentage of completion 15% 65% How much is the profit recognized in 20x2?In 20x1, ABC Co. enters into a contact with a customer for the construction of a building. The contract price is P6M. ABC Co. uses the 'cost-to-cost' method in measuring its progress on the contract. - ABC Co. estimates total contract costs at completion of P4M. ABC incurs actual costs of P1M in 20x1. - In 20x2, ABC incurs actual costs of P2.45M and revises its estimate of total contract costs at completion to P4.6M. - ABC completes the construction in 20x3. The actual total cost of the contract is P4.5M. How much is the profit recognized in 20x3?1. In accounting for a long-term construction contracts, using percentage-of-completion (over time) method, the amount of construction in progress account: a. Is the same with the total revenue recognized. b. Is equal to the gross profit for the year plus the actual cost incurred. c. Total contract price multiplied by the percentage of completion. d. All of the choices 2. A franchisor, charges an initial franchise fee of P920,000, with P200,000 paid when the agreement is signed and the balance in five annual payments. The present value of the future payments, discounted at 10% is P545,872. Franchise operations already started and no future services are required to be performed. The amount of revenue from franchise fees is?
- ABC Co. estimates total contract costs at completion d In 20x2. ABC incurs actual costs of P2.45M and revizes its ABC completes the construction in 20x3 The actual total 6. In 20x1, ABC Co. enters into a contact with a customer for the uses the cost-to-cost method in measuring its progress on the estimate of total contract costs at completion to P4.6M. construction of a building. The contract price is P6M. ABC Co. me contract. cost of the contract is P4.5M. How much is the profit recognized in 20x3? a. 420,000 b. 450,000 c 500,000 d. 550,000Use the following information for the next three questions: In 20x1, Friedland Co. entered into a contract with a customer for the construction of a building. The contract price is a fixed fee of P12,000,000. Information on the contract is shown below: 20x1 20x2 Costs incurred per year Estimated costs to complete 3,920,000 5,080,000 5,880,000 1,000,000Use the following information for the next two questions: Bass Co. appropriately uses the cost-to-cost method in measuring construction contract with a customer. its progress on Information on this contract, which was completed in 20x3, is a shown below: 20x1 20x2 20x3 20,000,000 20,000,000 20,000,000 Transaction price Profit each year Costs incurred each year (200,000) 8,200,000 400,000 1,400,000 3,600,000 (AICPA - Adapted) 1. 10. How much are the contract costs incurred in 20x2? a. 5,800,000 b. 6,200,000 c. 6,600,000 d. 10,200,000 11. How much are the estimated additional costs to complete as of December 31, 20x2? a. 5,400,000 b. 6,800,000 c. 7,200,000 d. 8,600,000