pany recognizes construction revenue over time. Data on this project for 2022-2024 follow: Contract
1.On March 1, 2022, AGGREGATES Company enters a contract to build a hotel which
is estimated to cost P31,200,000. The company recognizes construction
revenue over time. Data on this project for 2022-2024 follow:
Contract
Billings
Costs
incurred
Est’d Costs
to Complete
2022 10,500,000 5,460,000 20,540,000
2023 12,500,000 9,984,000 13,156,000
2024 14,440,000 15,756,000 -
The contract contains a penalty clause that penalizes the company a reduction
of P70,000 from the contract price for every week of delay. In 2024, the
contract was delayed for 8 weeks
What is the gross profit for 2024?
A. 1,164,000 C. 1,724,000
B. 1,466,400 D. 1,824,000
2.MOC Construction Company started work on three job sites during the current
year. Any costs incurred are expected to be recoverable. Data relating to
the three jobs are given below:
Site Contract
Price
Cost
Incurred
Estimated Costs
to Complete
Billings on
Contract
Collections
on Billings
1 5,000,000 3,750,000 - 5,000,000 5,000,000
2 7,000,000 1,000,000 4,000,000 900,000 900,000
3 2,500,000 1,000,000 1,000,000 1,500,000 1,000,000
* If the company records revenue over time, how much must be shown as current
asset in the balance sheet of MOC Construction Company as of December 31?
A. 5,500,000 C. 250,000
B. 500,000 D. 100,000
*If the company records revenue at a point in time, how much must be shown as
current asset in the balance sheet of MOC Construction Company as of December
31?
A. 5,100,000 C. 250,000
B. 500,000 D. 100,000
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