On September 1, 20x1, XYZ Co. enters into a contract with a customer to remodel a plant's electrical wirings and install a new generator for a total consideration of P12M. The remodeling and the installation are treated as a single performance obligation satisfied over time.

The expected contract costs are as follows:

Generator 4,000,000

Other costs. 5,000,000 Expected total contract costs 9,000,000

Additional information:

XYZ Co. uses the cost to cost method in measuring its progress towards the complete

satisfaction of the performance obligation

XYZ Co. incurs total costs of P6,000,000 in 20x1, including the cost of the generator. The customer obtains control of the generator when it is delivered to the site in December 20x1. However, the generator will not be installed until March 20x2.

XYZ Co. regards the cost of the generator as significant in relation to the expected total contract

costs. Although XYZ Co. acted as a principal in procuring the generator, XYZ Co. is not involved in designing or manufacturing the generator.

35. How much revenue is recognized in 20x1?

36. How much profit is recognized from the contract in 20x1?