On January 1, 2021, ABC Company accepted a long-term construction contract to construct a building with an initial contract price of P100,000,000. The outcome of the construction project can be estimated reliably. During 2023, an increase in the contract price due to change in project design was agreed upon. Cost data are provided below: Cumulative costs incurred as of the end of the year Realized gross profit (loss) for the year Percentage completion as of the end of the year 12/31/2021 12/31/2022 12/31/2023 P10,000,000 ? P108,000,000 ? P350,000 (P1,600,000) 60% 100% 12.5%
On January 1, 2021, ABC Company accepted a long-term construction contract to construct a building with an initial contract price of P100,000,000. The outcome of the construction project can be estimated reliably. During 2023, an increase in the contract price due to change in project design was agreed upon. Cost data are provided below: Cumulative costs incurred as of the end of the year Realized gross profit (loss) for the year Percentage completion as of the end of the year 12/31/2021 12/31/2022 12/31/2023 P10,000,000 ? P108,000,000 ? P350,000 (P1,600,000) 60% 100% 12.5%
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter17: Advanced Issues In Revenue Recognition
Section: Chapter Questions
Problem 26E
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• How much is the revised contract price as a result of the change in product design?
• How much is the contract cost charged to profit or loss in 2023?
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