ABC Construction Company began work on a contract in 2022 and completed the contract in 2023. The total contact price was P8,500,000. Information related to the construction project are as follows: 20222023Costs incurred during the yearP1,200,000P6,250,000Estimated costs to complete4,800,000-Progress billings during the year1,450,0007,050,000Collections during the year800,0006,000,000How much is the gross profit to be recognized in 2023?

Solution: Under percentage of completion method of revenue recognition, revenue is recognized based…

Answered: ABC Construction Company began work on…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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ABC Construction Company began work on a contract in 2022 and completed the contract in 2023. The total contact price was P8,500,000. Information related to the construction project are as follows:

	2022	2023
Costs incurred during the year	P1,200,000	P6,250,000
Estimated costs to complete	4,800,000	-
Progress billings during the year	1,450,000	7,050,000
Collections during the year	800,000	6,000,000

How much is the gross profit to be recognized in 2023?

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