NOTE: concerned with Philippine Government Accounting

1. The following information were made available relative to the construction of an annex building of DTI, Region VIII:

Appropriation P20M

Allotment for Capital Outlay 18M

NCA received from DBM is net of estimated tax

Cost of the project 16M

5% performance bond paid by the contractor.

15% mobilization fee was advanced to the contractor

P8,500 liquidating damages was imposed due to delay in completion.

10% retention was deducted for each billing until completed.

Billings:

1st - 25% completion

2nd 55% completion

3rd and final completion

The project was turned-over after the completion of the project. All liabilities were settled and remitted all due payments.

Required: Give the journal entries of the following:

a.1) The performance bond collected was temporarily deposited to the national treasury.

• To record the receipt of cash from the contractor paid as performance bond
• To record the temporary deposit of the performance bond to the National Treasury

a.2) granting of cash advance to the contractor.

• To record the 15% of the contract amount as advances to contractor

a.3)when the 3rd and final completion was received and paid.

• To record the receipt of the 3rd and final billing.
• To record the payment

a.4) the project is turned-over and the performance bond was also released.

• To record the turn-over and acceptance of the building extension.
• To record remittance of withholding taxes thru TRA.
• To record receipt of NCA for deposited performance bond to be returned.

• To record release of performance bond
• Refund of retention fees to contractor.