Question
On January 1, 2020, an entity entered into a long-term construction contract with fixed contract price of P2,500,000. The entity billed its client as follows:
On January 1, 2020, an entity entered into a long-term construction contract with fixed contract price of P2,500,000. The entity billed its client as follows: 30% during 2020, 40% during 2021 and the remainder at the year of project completion. The following data were provided by the cost accountant of the entity.
Cumulative Cost incurred as of the end of the year
2020 1,100,000
2021 1,800,000
2022 2,400,000
Estimated remaining cost to complete at the end of the year
2020 1,650,000
2021 450,000
2022 --
1.What is the excess of construction in progress over progress billings on December 31, 2020 under percentage of completion method?
2.What is the excess of construction in progress over progress billings on December 31, 2021 under cost recovery method?
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Payroll Accounting 2018
Authors: Jeanette Landin, Paulette Schirmer
4th edition
1260005127, 1259742514, 1260005165, 126000516X, 978-1259742514
