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No.1 In 20x1. ABC Co. was contracted to build a railroad. The contract price is equal to the construction costs incurred plus 20% thereof. However. ifthe Project is completed within 4 vears, ABC will receive an additional pavment of P200000. Information on the project is shown below: 2031 20:2 2036 Costs incurred to date 2.400.000 4.525.000 5.125.000 Estimated costs to complete 3.600.000 1.525.000 125.000 In 20x1 and 20x2. it was not highlv probable that the project will be completed on time. However. in 20x3, ABC assessed that project will be completed earlier than originallv expected and thus it is now highly probable that the incentive payment will be received. How much profit is recognized on the contract in 2023? 0 595,000 0 634,000 '0. 506,000 0 603,000 No.2 In 21:11-11. Gorgeous Too Co. enters into a fixedprice construction contract with a customer. At contract inception, Gorgeous Too Co. assesses its performance obligations in the contract and concludes that it has a single performance obligation that is satised over Ave. Gorgeous Too Co. determines that the measure of progress that best depicts its performance on the contract is input method based on costs incurred. Information on the contra ct follows: 21:13:] 2121:: Cumulative contract costs incur red 2.251113% Alium Cum ulatiue profits recognized 7150.131131] 1.2011012") Progress billings 2,4D1].1]DD 3.50D,D1JD Collections on progress billings 4.01311],1211]D The contract is completed in 21:11-12. How mu ch is the transaction price in the contract? (.1 s.ooo,ooo o s.oo,ooo o ?.ooo.ooo a cocoa-co No.3 In 213311. Salamagi Co. entered into a contract with a customer. The contract stipulates the following: I Contract price of P21],1]DD.DDG I 5% mobilization fee due upon signing of the contract, to be deducted from the nal billing I 10% customer retention on all subsequent progress billings. to be paid to Salamagi on completion of the project Salamagi Co. estimated a FED-00.001] gross profit from the project. The percentage of completion method will be used. In 20x1, Salamagi billed the customer for 50% completion of the project. The customer accepted all the billings, except one for 10% which was accepted on January of the following year. All the accepted billings were collected during the year except an 3% billing which was due January of the following year. What is the amount of profit recognized from the contract in 20x1? c. 2,soo.ooo c1 2.?2oooo c1 assoc-no c1 2,9ooooo No.41 Which of the following does not indicate that a promise to transfer a good or service is separately identifiable? o The good or servioe is not highly interrelated with other goods or services promised in the contract. o The good or service is not an input to a combined output specified by the customer. o The good or service does not significantly modify another good or service promised in the contract. :3 The customer's decision of not purchasing a good or service affects the other promised goods or services in the contract. No.1 1I..I'.1!tLE[:|II13T ION Construction Co. entered into an PEDM xed price contract for the construction of a private road for FAREWELL SPEECH, Inc. The performance obligation on the contract is satisfied over time. 1IMLE[ZIIIETIEIN measures its progress on the contract using the "costto cost" method. The estimated total contract cost is P UALEDICTIDN incurred the following costs in the first 1.u'ear of the construction: Costs of negotiating the contract {cha rged immediatelv as expense} 400,000 Costs of materials used in construction 12,000,000 Costs of materials purchased but not vet used in construction 2.000.000 Site labor costs 4,000.000 Site supervision costs 300.000 Depreciation of equipment used in construction 430,000 Depreciation of idle equipment not used in the contract 240,000 Costs of moving equipment and materials to and from the construction site 1150.000 Costs of hiring equipment 5150.000 Advance pa vment to subcontractor {the subcontracted work is not vet started} 30.000 How much revenue is recognized in the first 1.u'ear of the contract? I:- 25M c:- 45M .. 35M D 45M No.0 In 20:11, Salamagi Co. entered into a contract 1.Ivith a customer. The contract stipulates the following
