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On July 1, 2018, Abe Construction, Inc. contracted to build an office building for Juan dela Cruz Corp. for a total contract price of
On July 1, 2018, Abe Construction, Inc. contracted to build an office building for Juan dela Cruz Corp. for a total contract price of P1,950,000. On July 1, Juan dela Cruz estimated that it would take between 2 and 3 years to complete the building. On December 31, 2000, the building was deemed substantially completed. Following are accumulated contract costs incurred; estimated costs to complete, the contract, and accumulated billings to Juan dela Cruz for 2018, 2019, and 2020. At 12/31/18 At 12/31/19 At 12/31/20 Contract costs incurred to date 2P 150,000 P1,200,000 P2,100,000 Estimated costs to complete the contract Billings to Juan dela Cruz 1,350,000 300,000 800,000 1,100,000 -0- 1,850,000 Using the percentage of completion method, the income or loss from construction to be recognized by Abe in 2019 would be: a. P95,000 b. P50,000 o c. P30,000 d. 'P75,000
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