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    Revenue Recognition: Long Term Construction

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    Lee Suarez
    Joey Building Inc. began a four-year construction project in 20x4 with a contract price of P300 million. In 20x5, Joey recognized P22 million in gross profit and collected P46 million in cash from the project. The accounts receivable was P14 million, construction in progress was P66 million, and billings exceeded progress by P9 million. Johnson Builders began a three-year construction project in 20x4 priced at P7,525,000. In 20x4, their accounts receivable was P150,000, construction in progress was P602,000 with progress billings of P562,000. Their gross profit recognized was P301,000.

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    Revenue Recognition: Long Term Construction

    Uploaded by

    Lee Suarez
    169 views2 pages
    Joey Building Inc. began a four-year construction project in 20x4 with a contract price of P300 million. In 20x5, Joey recognized P22 million in gross profit and collected P46 million in cash from the project. The accounts receivable was P14 million, construction in progress was P66 million, and billings exceeded progress by P9 million. Johnson Builders began a three-year construction project in 20x4 priced at P7,525,000. In 20x4, their accounts receivable was P150,000, construction in progress was P602,000 with progress billings of P562,000. Their gross profit recognized was P301,000.

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    ADVAC4

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    Joey Building Inc. began a four-year construction project in 20x4 with a contract price of P300 million. In 20x5, Joey recognized P22 million in gross profit and collected P46 million in cash from the project. The accounts receivable was P14 million, construction in progress was P66 million, and billings exceeded progress by P9 million. Johnson Builders began a three-year construction project in 20x4 priced at P7,525,000. In 20x4, their accounts receivable was P150,000, construction in progress was P602,000 with progress billings of P562,000. Their gross profit recognized was P301,000.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    169 views2 pages

    Revenue Recognition: Long Term Construction

    Uploaded by

    Lee Suarez
    Joey Building Inc. began a four-year construction project in 20x4 with a contract price of P300 million. In 20x5, Joey recognized P22 million in gross profit and collected P46 million in cash from the project. The accounts receivable was P14 million, construction in progress was P66 million, and billings exceeded progress by P9 million. Johnson Builders began a three-year construction project in 20x4 priced at P7,525,000. In 20x4, their accounts receivable was P150,000, construction in progress was P602,000 with progress billings of P562,000. Their gross profit recognized was P301,000.

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    © All Rights Reserved
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    Download as docx, pdf, or txt
    of 2

    REVENUE RECOGNITION: LONG TERM CONSTRUCTION

    Question 10: XI - Incomplete Data


    In 20x4, Joey Building Inc. began work on a four-year construction project The contract price is P300
    million. Joey uses the overtime/percentage-of-completion method accounting. At the end of 20x5, the
    following financial statement information indicates the results to date for Cincy One:
    Income Statement:    
    Gross profit (before taxes) recognized in 20x4 P 22
     
    million
    Balance Sheet:    
    Accounts Receivable from construction billings P14
     
    million
    Construction in progress P 66 million  
    Less: Billings on construction (75 million)  
    Net billings in excess of construction in progress   P 9 million
    Cash Flow Statement    
    Cash Collection P 46
     
    million

    Required: Compute the following, placing your answer in the spaces provided and supporting
    computations below:
    1. 3Cash collected by Joey on Cincy One during 20x4
    2. Actual costs incurred by Joey on Cincy One during 20x4
    3. On December 31, 20x4, the estimated remaining costs to complete
    4. The percentage of Cincy One that was completed during 20x4

    Question 11: XII - Incomplete Data


    In 20x4, Johnson Builders began construction work under a three-year contract at a price d
    P7,525,000. The firm uses the overtime/percentage-of-completion method for finances accounting
    purposes. The income to be recognized each year is based on the proportion of cost incurred to the
    total estimated costs for completing the contract. The financial statement presentations relating to this
    contract on December 31, 20x4, are:
    Balance Sheet:    
    Accounts Receivable   P 150,000
    Construction in progress P  
    602,000
    Less: Progress billings 562,000 40,000
    Income Statement    
    Gross profit on construction contracts   P 301,000
     
    Required: Determine the:
    1. Cash collected in 20x4.
    2. Estimated income on the construction contract.

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