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1 1 point In 2 0 x 4 , Kalye Construction Company was contracted to build the private road network of Alaya Subdivision for P

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In 20x4, Kalye Construction Company was contracted to build the private road network of Alaya
Subdivision for P100 million. The project was expected to be finished in 2 years, and the contract
provided for:
A five percent mobilization fee (to be deducted from the last billing), payable within 14 days
from the contract signing. A retention provision of ten percent on all billings payable with
the final bill atter the complete project is cancelled.
ayment of progress billings within 7 days from acceptance.
Kalye, which uses the percentage-of-completion method of accounting for income, estimated a 25%
gross margin on the project. By the end of the year, Kalye had presented progress billing to Alaya
corresponding to 50% completion. Alaya accepeted all the bills presented, except one for 10% which
was accepted on January 5 of next year. With the exception of the second to the last billing for 8%
which was due on January 3 of next year, all accepted billing were settled. In 20x4, Kalye
Construction Company realized gross profit from the project the amount of:
P7,500,000
P10,000,000
P12,500,000
P25,000,000
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