ounting for construction contracts 12. In 20x1, Devin Co. enters into a contract to construct a...

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ounting for construction contracts 12. In 20x1, Devin Co. enters into a contract to construct a building for a customer. Devin Co. identifies its performance obligation to be satisfied over time. Devin Co. measures its progress on the contract based on costs incurred. The contract price is P10M. Devin has an unconditional right to all billings made in accordance with the billing schedule stated in the contract. Information on the construction is provided below: a. Contract costs incurred to date b. Billings per year C. Collections on billings per year d. Estimated costs to complete (at each yr.-end) 'Zero-profit method' 20x1 20x2 20x3 3,150,000 5,680,000 7,120,000 4,000,000 5,000,000 1,000,000 3,600,000 4,500,000 1,900,000 3,850,000 1,420,000 13. Use the information in the preceding problem except that Devin Co. cannot reasonably measure the outcome of the performance obligation but expects to recover all contract costs incurred (i.e., ignore the 'estimated costs to complete'). Requirements: a. Compute for the gross profits, revenues and costs of construction in 20x1, 20x2 and 20x3, respectively. and (ii) PFRS 15. 637 b. Provide the journal entries under (i) traditional accounting Determine the amounts presented in the financial statements. C. ounting for construction contracts 12. In 20x1, Devin Co. enters into a contract to construct a building for a customer. Devin Co. identifies its performance obligation to be satisfied over time. Devin Co. measures its progress on the contract based on costs incurred. The contract price is P10M. Devin has an unconditional right to all billings made in accordance with the billing schedule stated in the contract. Information on the construction is provided below: a. Contract costs incurred to date b. Billings per year C. Collections on billings per year d. Estimated costs to complete (at each yr.-end) 'Zero-profit method' 20x1 20x2 20x3 3,150,000 5,680,000 7,120,000 4,000,000 5,000,000 1,000,000 3,600,000 4,500,000 1,900,000 3,850,000 1,420,000 13. Use the information in the preceding problem except that Devin Co. cannot reasonably measure the outcome of the performance obligation but expects to recover all contract costs incurred (i.e., ignore the 'estimated costs to complete'). Requirements: a. Compute for the gross profits, revenues and costs of construction in 20x1, 20x2 and 20x3, respectively. and (ii) PFRS 15. 637 b. Provide the journal entries under (i) traditional accounting Determine the amounts presented in the financial statements. C.