Answer the following
The performance obligation is satisfied over time. However, Builder Co. cannot reasonably measure the outcome of the performance obligation but expects to recover all contract costs incurred. How much are the gross profit, revenue and cost of construction recognized in 20x2, respectively? Gross profit Revenue 0 Cost of construction a. 0 b. U 3,900,000 3,900,000 0 2,400,000 0 2,400,000 d. (240,000) 0 5. At contract inception, Builder Co. assessed the contract in accordance with the principles of PERS 15 and concludes that it has a single performance obligation that is satisfied at a point in time, which is when the construction is completed Use the following information for the next three questions: and legal title over the constructed building is transferred to In 20x1, Builder Co. entered into a contract with a customer for the the customer. How much are the gross profit, revenue and construction of a building. The contract price is a fixed fee of ost of construction recognized in 20x2, respectively? P9,000,000. Information on the contract is shown below: Gross profit Revenue Cost of construction Dec. 31, 20x1 Dec. 31, 20x2 a. 0 0 3,900,000 3,900,000 Cumulative contract costs incurred 6,300,000 b. 3,900,000 Estimated total cost at completion 7,800,000 2,400,000 8,100,000 2,400,000 d. (240,000) 0 3. At contract inception, Builder Co. assessed the contract in accordance with the principles of PFRS 15 and concludes that 6. Entity A, a construction firm, started work on a construction it has a single performance obligation that is satisfied over contract with a fixed price of P18M in 20x1. At contract time. Builder Co. determined that the appropriate measure of inception, Entity A estimated total contract costs of P12M. The its progress on the contract is input method based on costs estimate remained unchanged in 20x1 but a change in incurred. How much are the gross profit, revenue and cost of circumstance in 20x2 made Entity A reassess the estimate. construction recognized in 20x2, respectively? Entity A concluded on Dec. 31, 20x2 that P12.3M is a more Gross profit Revenue Cost of construction appropriate estimate of the total contract costs. Construction a. 700,000 7,000,000 6,300,000 work was finished in 20x3. The following were the actual costs b. 250,000 4,500,000 incurred: 4,250,000 C. 100,000 2,500,000 2,400,000 20x1 20x2 20x3 d. 80,000 2,500,000 2,420,000 Contract costs incurred per year 3,000,000 5,364,000 3,916,000 Entity A's single performance obligation on the contract Great uses the percentage of completion method (based on costs) satisfied over time. Entity A uses the cost-to-cost method in recognizing revenue and profit from the contract. measuring its progress on the contract. How much is the profit recognized in 20x3? 8. How much is the loss provision recognized in 20x2? C. 1,798,000 a. 10,000 C. 25,000 1,386,000 b. 15,000 d. 115,000 b. 1,597,000 d. 1,844,000 7. On Jan. 1, 20x1, Saturday Construction Co. enters into a 9. How much is the profit (loss) recognized in 20x3? a. (40,000) c. (30,000) contract to construct a building for a customer. Saturday b. 40,000 d. 10,000 identifies its performance obligation in the contract as satisfied over time. Saturday uses the input method based on costs to Use the following information for the next two questions: measure its progress on the contract. The contract price is P8M. Information on the construction is provided below: on January 1, 20x1, Frowny Co. enters into a contract with a 20x1 20x2 customer for the construction of a building. Frowny's performance 20x3 1,830,000 4,840,000 6,000,000 obligation on the contract is satisfied over time. Frowny uses the Contract costs incurred to date. "cost-to-cost' method in measuring its progress on the contract. Billings per year 4,000,000 3,000,000 1,000,000 Information on the contract follows: Estimated costs to complete 4,270,000 1,210,000 Transaction price 3,000,000 Estimated total costs of construction, Dec. 31, 20x1 2,250,000 All billings in a year were collected also in that year. What Percentage of completion, Dec. 31, 20x1 40% amounts are presented in Saturday's Dec. 31, 20x2 statement of Contract costs incurred to date, Dec. 31, 20x2 1,800,000 financial position under traditional accounting and PFRS 15, Estimated costs to complete, Dec. 31, 20x2 600,000 respectively? Gross amount due from (due to) cust. Contract asset (liability) 10. How much is the estimated costs to complete as of Dec. 31, a. 600,000 600,000 20x1? b. (600,000) (600,000) a. 860,00 c. 1,350,000 C. (1,000,000) (1,000,000) b. 970,000 d. 1,420,000 d. 600,000 (400,000) 11. How much are the revenue and cost of construction Use the following information for the next two questions: recognized in 20x2? In 20x1, Great Construction Co. started work on a P5M fixed price Revenue Cost of construction contract. Information on the construction is shown below: a. 1,050,000 900,000 20x1 20x2 20x3 b. 1,050,000 850,000 Costs incurred per year 1,425,000 2,615,000 1,040,000 C. 1,000,000 850,000 Estimated costs to complete 3,325,000 1,010,000 1,100,000 950,000
