Please help me answer 12-16 just wanna check if I got the right answers thank you this is from the book of Millan accounting for special transactions
Selling costs 7 0320 Provide the journal entries under (i) traditional accounting Total costs incurred to date 1050,000 and (ii) PFRS 15. Requirement: Compute for the percentage of completion. Determine the amounts presented in the financial statements. Onerous contract Accounting for construction contracts 12. In 20x1, Devin Co. enters into a contract to construct 4. Athena Co. started work on an PSM fixed-price construction building for a customer. Devin Co. identifies its performance contract in 20x1. Information on the contract is as follows: 20x1 20x2 obligation to be satisfied over time. Devin Co. measures its 20x3 Costs incurred per year 2,850,000 ,670,000 progress on the contract based on costs incurred. The contract 1,600,000 Estimated costs to complete 4,275,000 1,630,000 price is P10M. Devin has an unconditional right to all billings made in accordance with the billing schedule stated in contract. Information on the construction is provided below: Requirement: Compute for the amounts recognized in profit or loss 20x1 20x2 n 20x1, 20x2 and 20x3, respectively. 20x3 Contract costs incurred to date 3,150,000 5,680,000 7,120,000 Incentive payment . Billings per year 4,000,000 5,000,000 1,000,000 5. On July 1, 20x1, Zevrek Co. enters into contact with a Collections on billings per year 3,600,000 4,500,000 1,900,000 customer for the construction of a building. The contract price d. Estimated costs to complete s P6M. However, Zevrek Co. is entitled to a bonus of P500,000 (at each yr.-end) 3,850,000 1,420,000 if the building is completed within 3 years. Zevrek Co. uses the 'cost-to-cost' method in measuring its progress on the Requirements: contract. At contract inception, Zevrek Co. estimates total Compute for the gross profits, revenues and costs of contract costs of P4M. construction in 20x1, 20x2 and 20x3, respectively. Provide the journal entries under (i) traditional accounting In 20x1, Zevrek Co. incurs total costs of P1,350,000. Due to bad and (ii) PFRS 15. weather conditions, Zevrek Co. does not expect that it can finish c. Determine the amounts presented in the financial statements. the building on time for it to be entitled to the bonus. The estimated costs to complete as of the end of 20x1 are P2.4M. "Zero-profit method' 13. Use the information in the preceding problem except that In 20x2, Zevrek Co. incurs total costs of P2,260,000. Due to Devin Co. cannot reasonably measure the outcome of the mprovements in weather conditions, Zevrek Co. now believes performance obligation but expects to recover all contract that it is highly probable that the building will be finished on time costs incurred (i.e., ignore the 'estimated costs to complete'). and the bonus will be received. The estimated costs to complete as of the end of 20x2 are P190,000. Requirements: Compute for the gross profits, revenues and costs of Requirement: Compute for the revenues, costs of construction and. construction in 20x1, 20x2 and 20x3, respectively. gross profits in 20x1 and 20x2, respectively. Output method - Uncertainty in collectability of revenue 16. Eureka Co. started work on a P10M fixed price construction contract in 20x1. The performance obligation in the contract is satisfied overtime. Eureka Co. measures its progress based on professional survey of performance completed to date (i.e., an output method). The estimated total contract costs are P6M. Information on the contract is as follows: 20x1 20x2 Costs incurred per year 2,700,000 1,980,000 Progress on the contract 42% 80% The customer accepted all billings but defaulted in its payment in 20x2. Eureka Co. assessed, on December 31, 20x2, that it cannot collect 4% of the total contract price. Requirement: Compute for the revenues, costs of construction and profits recognized in 20x1 and 20x2, respectively
