In November 20X2, an entity contracts with a customer to refurbish a 3-storey building and install new elevators for a total consideration of P5,000,000. The promised refurbishment service, including the installation of elevators, is a single performance obligation satisfied over time. Total expected costs are P4,000,000, including P1,500,000 for the elevators. The entity determines that it acts as a principal because it obtains control of the elevators before they are transferred to the customer. A summary of the transaction price and expected costs is as follows: P5,000,000 Transaction price Expected costs: Elevators Other costs Total expected costs_ P1,500,000 2.500.000 P4,000,000 The entity uses an input method based on costs incurred to measure its progress towards complete satisfaction of the performance obligation. The customer obtains control of the elevators when they are delivered to the site in December 20X2, although the elevators will not be installed until June 20X3. The costs to procure the elevators are significant relative to the total expected costs to completely satisfy the performance obligation. The entity is not involved in designing or manufacturing the elevators. As of December 31, 20X2, the entity has incurred total costs of $500,000, excluding the cost of the elevators. 17. How much revenue is recognized in 20X2? a. 1,000,000 b. 2,200,000 c. 2,500,000 d. 0 18. How much profit is recognized from the contract in 20X2? a. 265,000 b. 220,000 C. 200,000 d. 0