1.On July 1. 2016, ABC Construction Corp. contracted to build an office building for XYZ Inc. for a total contract price of P975,000. 2016 2017 2018 Contract cost incurred to date 75,000 600,000 1,050,000 Estimated costs to complete the contract 675,000 400,000 Billings to XYZ, Inc. 150,000 550,0,00 275,000 1. Under the percentage of completion method, how much is the Construction-in-Progress at Decem ber 31, 2017? A. 650,000 B. 575,000 C. 672,500 D. 597,500 2. Under the zero-profit method, how much is the Construction-in-Progress, net of Progress Billings at Dec ember 31, 2017? A. (125,000) B. 125,000 C. 50,000 D. (50,000) 3. Under the percentage of completion method, how much is the realized gross profit/(Ioss) at December 31, 2018? A. (75,000) B. (100,000) C. (50,000) D. (72,500) 2. EFG Construction was recently awarded a P6,730,000 contract to construct a trade center for Ayala Inc, EFG Construction estimated it will take 46 months to complete the contract. The company uses the percentage of completion method to estimate profits. (use two decimal places for the percentage of completion). Example 62.48% The following information details the actual and estimated costs for the year 2017-2020: Year Actual Cost Each Year Estimated Cost to Complete 2017 3,120,000 3,264„000 2018 1,584,000 1,800,000 2019 1,152,000 912,000 2020 1,080,000 How much is the balance of Construction in Progre ss account as of 2019? A. 5,818,000 B. 5,856,000 C. 5.808,000 D. 5800,000 3. DM. Inc. works on a P10.500.000 contr act in 2016 to construct an office building. During, 2016. DM, Inc, uses the cost to cost method. At December 31, 2016. the balances in certain accounts were; Construction in progress — P3,780,000 Accounts receivable — P360,000 Billings on construction in process P1,800,000 Contract retention — P180,000 Mobilization fee — P140,000
At December 31, 2016, the estimated cost at completion is P7,350,000. How much is the realized gross profit in 2016? A. 1,102,500 B. 1,062,500 C. 1,242,500 D. 1,134,000 4. On January 1, 2016, B rave Construction Corporation began constructing a P2,100,000 contract. The entity used the percentage of completion method. For the year ended December 31, 2017, Brave Construction billed its client an additional 55% of the contract price. 2016 2017 2018 Construction in progress 441,000 ? ? Estimated costs to complete ? ? Costs incurred 425,250 969,000 675,750 Excess of construction in progress over billings (84,000) (330,750) 1.How much is the estimated remaining cost in 2016 ? A. 1,599,750 B. 1,155,000 C. 1,680,000 D. 1,584,000 2. How much is the realized gr oss profit (loss) in 2017? A. (45,000) B. 15,750 C. (60,750) D. 30,000 3. How much is the balance of construction in progress in 2017? A. 1,680,000 B. 2,010,750 C. 1,349,250 D. 1,365,000
