Chapt

er8
Probl
emI
1.
InputMeasure-Pe rcentageofCompl
eti
onMe
thod(
Costt
oCos
tMet
hod)
2008:
Contractpric
e P1
,
800,
000
Act
ualcoststoda t
e P450,
000
Est
ima t
edc ost
stoc omplet
e 1,
200,
000
Totalest
ima t
edpr oj
ectcos
ts 1
,
650,000
Est
ima t
edtotalgrossprofi
t 150,
000
Perc
en t
ageofc ompl e
ti
on:
P450,000/P, 1650,000 27.
27%
Grossprofi
tr e
cogn i
zed P40,
905

2009: P1
,
800,
000
Cont
rac
tpr
ice
Cos
tsi
ncur
red:
2008 P450,
00
2009 1
,1
00,
000
Tot
alc
ost 1,
550,
000
Tot
algr
ossprof
it 250,
000
Rec
ogn
izedin2008 40,
905
Rec
ogn
izedin2009 P209,
095
2.
InputMeasure-CostRecove
ryMe t
hod
2008:(a
llcos
tsnotyetr
ecov
ered) P-0-
2009:
Cont
ractpric
e 1
,
800,
00
Cost
sincur
red: 2008 P450,
000
2009 1
,
100,
000
Tot
alc
ost 1,
550,
000
Tot
alg
ros
spr
ofi
t P250,
000
Probl
emI I
1.
InputMeasure-Pe
rcentag eofComple
tionMe
thod(CosttocostMethod)
Years Gr ossProfit(
orLos
s) Supporti
ngcompu tations
re
cog n
ize d
2008 P2mi ll
ion (P1
08–90)x( P30/ P90)=P6mi ll
ion
2009 (P1 8milli
on ) Totall
ossis(
P108–1 20)=( P1 2mill
ion)
Toda te
,P6mi l
li
onwa sr e
cor ded:therefor
e,
(P1
2mi l
li
on)–P6mi llion=( P18mi l
lion)in
2009
2010 P10mi l
lion Totall
ossisP108–1 10)=(P2mi lli
on )
Toda te
,(P12mill
ionwa srecor de
d:
ther
efore,
(P2mi l
lion )–(P12mi l
l
ion)=P1 0
mill
i
onin201 0

2.
InputMeas
ure-CostRecov
eryMethod
Year
s Gr ossPr
ofi
t(orL
oss) Suppor t
ingcomputat
ions
2008 P-0- (P108–90)=P1 8a nti
ci
patedgrossprofi
t,
sonon e
edtor e
cogni
ze dagrossloss
2009 (
P12mi
ll
ion
) Totallossi
s(P108–1 20)=(12mi ll
ion)
2010 P10mi
l
li
on Totallossi
s(P1
08-1 1
0)–(P2mi ll
ion)
Toda te,(P1
2mi l
li
onwa sre
corded:
ther
e f
ore,(P2mill
ion
)–(P1 2mi l
li
on )=P1
0
mil
lionin2010
  
Pr
obl
emI
II
1
.JournalEnt
rie
s
a.I
nputMe as
ure–Percenta
g eofcomple
tion–(cos
t-t
o-costme
thod)
Thef ol
l
owingan
alys
isistodete
rminetheper
cent
ageofcompl
eti
on:
20x
3 20x
4 20x
5
Contr
actpr i
c e:
I
n i
ti
alamou ntofc ontr
act…………..
. P528,000 P528,
000 P528,000
Vari
ati
on ………………………………. . _______- __12,
000 __12,000
Totalc
ontrac tprice……………………. . P528,000 P540,
000 P540,000
Cost
sincurrede ac
hye a r
……………… P126,048 *P244,
032 P121,
920
Add:Costsincur r
edi nprioryear
s……. _______- _126,
048 _370,080
Act
ualcostsincu r
redt oda t
e(1)
…..
… P1
26,048 *P370,
080 P492,000
Add:Est
ima tedc oststocomplet
e….. _358,752 _121
,
920 _______-
Totales
ti
ma te dcos t
s(3)……..
………… P484,800 P492,
000 P492,000
Est
imatedg rosspr ofi
t…………………… P43, 200 P48,000 P48, 000
Perc
entageofc ompl et
ion(1
)/(3) 26% **74% 100%
*incl
udingth
eP7,200addi
ti
onal
cost
sin20x
4.
**its
h ou
ldbenotedtha
ttheper
cen
tageofc
omplet
ionfor20x
4isc
alc
ulat
edby deduct
ingtheP6,
000ofmat
eri
al
she
ldf
ort
hef
oll
owi
ng
per
iodfromth
ec os
tsi
ncu
rreduptotha
tyeare
nd,i.
e.,
P370,
080–P6,000=P364,
080,P364,
080/P492,
000=74% .

Th
ere
ven
ue,
expe
nse
s(c
ost
s)a
ndpr
ofi
twi
l
lber
ecog
nize
dinpr
ofi
torl
ossa
sfol
l
ows
:
Rec
ogni
zedi
n Recog
nizedin
20x3 Todat
e pri
orye
ars c
urrentyear
Reve
n u
e( P528,
000x26% ) P137,
280 - P1 37,
280
Cost
s/Expe n
ses(P484,
800x26% ) 1
26,
048 - 126,
048
GrossProfi
t(P43,200x26% ) P1 1
,
232 - P1 1
,
232

Rec
ogni
zedin Recog
nizedin
20x4 Todat
e pri
oryear
s c
urrentyear
Reve
n u
e( P540,
000x74% ) P399,
600 P137,
280 P262,320
Cost
s/Expe n
ses(P492,
000x74% ) _364,
080 _126,
048 238,
032
GrossProfi
t(P48,000x74% ) P 35,
520 P 1 1
,
232 P 24,288

Rec
ognize
di n Recog
nizedin
20x5 Todat
e pri
oryears c
urrentyear
Rev
enue(P540,000x100% ) P540,
000 P399,
600 P140,400
Cost
s/Ex
pe ns
es(P492,
000x100% ) _492,
000 _364,
080 _127,
920
Gr
ossProfi
t(P48,
000x100% ) P 48,
000 P 35,520 P1 2,
480

Al
te
rna
tiv
ely,
theg
ros
spr
ofi
tre
cog
nize
dea
chye
arma
yal
sobec
ompu
teda
sfol
l
ows
:
20x
3 20x
4 20x
5
Cont
rac
tpri
ce:
I
ni
ti
alamoun
tofc
ont
rac
t………….
.
.
..
.
. P528,
000 P528,
000 P528,
000
_______
V
ari
ati
on…………………………………… - __12,
000 1
2,
000
Tot
alc
ontra
ctpr
ice
………………………… P528,
000 P540,
000 P540,
000
Cos
tsi
ncur
redea
chyea
r…………………. P1
26,
048 P240,
032 P121
,920
_______
Add:Cost
sin
cur
redinpri
orye
ars
……….
. - _126,
048 _370,
080
Act
ualcos
tsi
ncu
rredtodat
e(1
)….
.
……. P1
26,
048 P370,
080 P492,
000
_______
Add:Esti
matedco s
tstocomplet
e……… _358,
752 _121
,
920 -
Totales
ti
ma t
edc ost
s(3)……..
……………. P484,
800 P492,
000 P492,
000
Est
imatedgrossprofi
t……………………… P43,
200 P48,000 P48,000
Perc
e n
tageofcompl e
tion(
1)/(3)
…….
.
. ____26% ____74% ___100%
Grossprofi
ttoda t
e…………………………. P1 1
,
232 P35,520 P48,000
_______
Le
ss:
Gros
sprof
iti
nprioryea
rs……………. - ___1 1
,232 __35,
520
Gros
spr
ofi
tinc
u r
ren
tye a
r-% ofc omplet
ion P1 1
,
232 P24,288 P12,
480
Gros
spr
ofi
tinc
u r
ren
tye a
r–c os
tre
c ov
erymethod P 0 P 0 P48,000

Fol
lowin
ga r
etheent
ri
esfort
heyear
s20x
3to20x
5:
Per
c e
ntageofCompl
eti
onMethod
20x
3 20x
4 20x
5
1
.Torecordc ost
sin
curr
ed:
Co
nstruct
ionInProgr
ess
*……….
.
..
.
. 1
26,
048 232,
032 1
27,
920
Mat
eria
lsInvent
ory………………….
. 6,
000 6,000
Cash,pa ya
bles
,et
c…………….
. 1
26,
048 244,
032 1
21,
920

2.Torec
ordprogres
sbill
i
ngs
:
Acc
ountsre
cei
vabl
e……………….. 1
44,
000 240,
000 1
56,
000
Progre
ssbi
ll
ings
*.…………………. 1
44,
000 240,
000 1
56,
000
 3.Torecordcol
l
ecti
ons:
Cas
h …………………………………. .
..
. 1
20,
000 228,
000 1
92,
000
Accoun
tsrec
eiv
able…………… 1
20,
000 228,
000 1
92,
000

4.Torecogn i
zeRevenu
e,Cost
s
andGr ossProfi
t:
Const
ru c
tionExpens
es……………… 1
26,
048 238,
032 1
27,
920
Const
ru c
tioninProg
ress
*..
……….
..
. 11
,
232 24,
288 12,
480
Revenu ef
romCon s
truc
ti
on.
.
.
..
. 1
37,
280 262,
320 1
40,
400

5.Toc l
oseCon s
t r
ucti
onInProgre
ss**
andPr ogre
ssBi l
li
ngsacc
ount:
Progressbi
ll
ings……………………… 540,
000
Con s
tru
ctionInProgre
ss………. 540,
000
*Theter
m” Con t
ractaccount”maya l
ter
nati
vel
ybeuse
d.
**I
f”Contr
a c
ta cc
ou nt
”isu s
edthennoe nt
ryisre
qui
redf
orNo.
5.

b.
InputMeas
ure–CostRec
overyMet
hod
Thefol
l
owingt
abl
eshowsth
edatanee
dedf
orf
urt
hera
nal
ysi
s:
20x
3 20x
4 20x
5
Contr
actpric
e:
I
niti
alamountofcont
ract…………..
. P528,
000 P528,
000 P528,
000
Vari
ati
on………………………………. . _______- __12,
000 __12,
000
Tota
lcontrac
tpric
e……………………. . P528,
000 P540,
000 P540,
000
Cost
sincurr
edeachyear……………… P1
26,
048 P244,
032 P121
,
920
Add:Cost
sincur
redinprioryea
rs……. _______- _126,
048 _370,
080
Act
ualcost
sincu
rredtoda t
e……..
.
.… P1
26,
048 P370,
080 P492,
000
Add:Est
imatedcos
tstocomplet
e….. ____ _? ____ _? _______-
Tota
lesti
ma t
edcost
s….……..………… P ? P ? P492,
000

Th
ere
ven
ue,
expe
nse
s(c
ost
s)a
ndpr
ofi
twi
l
lber
ecog
nize
dinpr
ofi
torl
ossa
sfol
l
ows
:
Rec
ogni
zedi
n Recog
nizedin
20x3 Todat
e pri
orye
ars c
urrentyear
Rev
enue* P126,
048 - P1 26,
048
Cost
s/Expe
nse
s 1
26,
048 - 126,
048
Gros
sProfi
t P 0 - P 0
*e
quiv
alen
ttocost
sin
cur
red
Rec
ognizedin Recog
nizedin
20x4 Todat
e pri
orye ar
s c
urrentyear
Rev
enue* P364,
080 P1 26,
048 P238,032
Cost
s/Expe
nse
s _364,
080 126,
048 238,
032
Gros
sProfi
t P 0 P 0 P 0
*e
quiv
alen
ttocost
sin
cur
red
Rec
ogni
zedi
n Recog
nizedin
20x
5 Toda
te pri
orye
ars c
urrentye
ar
Re
ven
ue(
P540,
000x1
00% ) P540,
000 P364,
080 P1
75,
200
Cos
ts/
Expe
nse
s(P492,
000x1
00% ) _492,
000 364,
080 1
27,
920
Gr
ossPr
ofi
t(P48,
000x1
00% ) P 48,
000 P 0 P 48,
000

Al
te
rna
tiv
ely,
theg
ros
spr
ofi
tre
cog
nize
dea
chye
arma
yal
sobec
ompu
teda
sfol
l
ows
:
20x
3 20x
4 20x
5
Cont
rac
tpri
ce:
I
ni
ti
alamoun
tofc
ont
rac
t………….
.
.
..
.
. P528,
000 P528,
000 P528,
000
_______
V
ari
ati
on…………………………………… - __12,
000 1
2,
000
Tot
alc
ontra
ctpr
ice
………………………… P528,
000 P540,
000 P540,
000
Cos
tsi
ncur
redea
chyea
r…………………. P126,
048 P244,
032 P121
,920
_______
Add:Costsin
cur redinprioryear
s……….
. - _126,
048 _370,080
Act
ua lc
ostsi
ncu rredtoda t
e……...
……. P126,
048 P370,
080 P492,
000
Add:Esti
ma t
edc o s
tstocomplet
e……… ____ _? ____ _? _______-
Totalest
imatedc ost
s……. ….
.……………. P ? P ? P492,
000
Est
ima t
edg r
osspr ofi
t………………………. P 0 P 0 P48,000
Perc
e nt
ageofc ompl e
tion……………….. _ -___ _ -___ ___1 00%
Grossprofi
ttoda t
e…………………………. P 0 P 0 P48,000
Les
s:Grossprofitinprioryears
……………. _______ _______- __ 0
 -
Gr
osspr
ofi
tinc
urr
entye
ar……………….
.
. P 0 P 0 P48,
000

Fol
l
owi
nga
ret
hee
ntr
iesf
ort
heye
ars20x
3to20x
5:
20x
3 20x
4 20x
5
1
.Torecordc ost
sin
curr
ed:
Con
struct
ionInProgr
ess
*……….
.
..
.
. 1
26,
048 238,
032 1
27,
920
Mat
eria
lsInvent
ory………………….
. 6,
000 6,000
Cash,pa ya
bles
,et
c…………….
. 1
26,
048 244,
032 1
21,
920

2.Torec
ordprogres
sbill
i
ngs
:
Acc
ountsre
cei
vabl
e……………….. 1
44,
000 240,
000 1
56,
000
Progre
ssbi
ll
ings
*.…………………. 1
44,
000 240,
000 1
56,
000

3.Torecordcol
l
ecti
ons:
Cas
h …………………………………. .
..
. 1
20,
000 228,
000 1
92,
000
Accoun
tsrec
eiv
able…………… 1
20,
000 228,
000 1
92,
000

4.Torecogn i
zeRevenu
e,Cost
s
andGr ossProfi
t:
Const
ru c
tionExpens
es……………… 1
26,
480 238,
032 1
27,
920
Const
ru c
tioninProg
ress
*..
……….
..
. 48,
000
Revenu ef
romCon s
truc
ti
on.
.
.
..
. 1
26,
480 238,
032 1
75,
920

5.Toc l
oseCon s
t ru
c t
ionInProgre
ss**
andPr ogres
sBi l
lingsaccou
nt:
Progressbil
li
ng s
……………………… 540,
000
Con st
ruct
ionI nProgres
s………. 540,
000
*Theterm”Con tr
ac taccount”mayalte
rnat
iv
elybeused.
** I
f”Cont
rac tacc
ou nt”isuse
dt he
nn oent
ryisrequ
ire
dforNo.
5.

2.
Duefrom/DuetoCus
tomers
a.I
nputMeas
ure-Perce
nta
geofCompl
eti
onMe
thod
Curr
entAs
set
:
20x3 20x4 20x
5
Ac
cou n
tsrecei
vabl
e………………………. P 24,
000 P 36,
000 P -
Otherrece
iva
bles:
Constr
ucti
onInProgres
s………………… P399,
600
Less
:P r
ogressbi
ll
in
gs……………………. _384,
000
Grossamountduef r
omc us
tome
rs….
.
. P1 5,
600
Ra
wma te
rial
sInve
ntor
y…………………… P 6,000

Cur
rentLi
abil
i
ty:
Pa
yable
s(”Payme
ntsonAc
cou
nt”
)
Pr
ogres
sbi
ll
ing
s ……………………………… P1
44,
000
Le
ss:
Const
ruc
tionInPr
ogres
s……………. _1
37,
280
Gros
samountduetocust
ome r
s………… P 6,
720

Con
str
uct
ionI
nPr
ogr
ess Pr
ogr
essBi
l
li
ngs
20x
3CI1 26,
048 1
44,
000 20x
3
Pr 11,
232
endofx31
37,280 1
44,
000 en
dofx3
20x4 CI 238,032 240,
000 20x
4
Pr 1 1
,232
endofx4399,600 384,
000 endofx
4
20x5CI 127,920 156,
000 20x5
Pr 1 2,480
540,
000 540,
000 540,
000 540,
000
wh
ere
:CI-cos
tin
curr
ede
achye
ar
Pr-prof
it

b.
InputMeas
ure–Cos
tRe
cov
eryMe
thod
Curr
entAs
set
:
20x3 20x4 20x
5
Ac
cou
ntsre
cei
vabl
e………………………. P 24,
000 P 36,
000 P -
Ra
wma t
eri
al
sInve
ntor
y…………………… P 6,000
 Cur
ren
tLi
abi
li
ty:
Pa
yabl
es(
”Pa
ymentsonAc
cou
nt”
)
Pr
ogres
sbi
ll
ing
s ……………………………… P1
37,
280 P384,
000
Le
ss:
Const
ruc
tionInPr
ogres
s……………. _1
44,
000 _364,
080
Gros
samountduetocust
ome r
s………… P 6,
720 P19,
920
Con
str
uct
ionI
nPr
ogr
ess Pr
ogr
essBi
l
li
ngs
20x
3CI1 26,
048 1
44,
000 20x
3
Pr 0
endofx3126,
048 1
44,000 endofx3
20x4 CI 238,
032 240,000 20x
4
Pr 0
endofx4364,
080 384,
000 endofx
4
20x5CI 127,
920 156,
000 20x
5
Pr 48,000
540,
000 540,
000 540,
000 540,
000
wh
ere
:CI-cos
tin
curr
ede
achye
ar
Pr-prof
it

3.
Gr os
sProf
it
a.
InputMeas
ure-Pe
rce
nta
geofCompl
eti
onMe
thod(
ref
ert
ore
qui
reme
nt1f
orde
tai
l
edc
omput
ati
on)
20x3 20x
4 20x5
Re
v e
n u
e……………………………………… P137,
280 P262,
320 P140,400
Le
ss:Cos t
s/Ex
pens
es…………………….
.
. _126,
048 _238,
032 _1
27,920
GrossProf
it
……………………………………. P 1 1
,232 P 24,
288 P12,480

b.
InputMe
asur
e–Cos
tRe
cov
eryMe
thod(
ref
ert
ore
qui
reme
nt1f
orde
tai
l
edc
omput
ati
on)
20x 3 20x
4 20x
5
Re
v e
n u
e……………………………………… P126,
048 P238,
032 P1
75,
920
Le
ss:Cos t
s/Ex
pens
es…………………….
.
. _126,
048 _238,
032 _1
27,
920
GrossProf
it
……………………………………. P 0 P 0 P 48,
000

Probl
emIV
1.
Anti
cipa
ted/
Gr ossL
oss
a.I
nputMeasure–Perce
nta
geofCompl
eti
on(
Cos
t-t
o-Cos
tMe
thod)

2008:
Contractpri
ce P2,
500,
000    
Act
ua lc
osttodate P1
,
500,
000
Est
ima t
edcostst
oc omplet
e 1
,
200,
000
Totalest
imate
dpr oj
ectcos
ts 2,
700,000 a
.Input
Est
ima t
edloss
,rec
og ni
zedin2008 P(200,000) Mea
Cos
s
ur
tRe
e–
cove
ry
Met
hod
2009: Lossi
n
Cont
ractpri
ce P2,500,
000 20x4
Cost
sin
c u
rred: I
n2008 P1
,
500,
000
I
n2008 1
,
300,
000
Tot
alc
ost 2,800,
000
Tot
all
oss P(300,000)
Rec
ogn
izedi
n2008 (200,000)
Rec
ogn
izedi
n2009 P(1 00,
000) P(200,
000)
L
ossi
n
20x
5 P(
100,
000)
2.
JournalEnt
ri
e s
a.
InputMeasure–Pe
rce
nta
geofCompl
eti
on(
Cos
t-t
o-Cos
tMe
thod)
2008:
Con
str
uc t
ioni
nprogr
ess 1
,
500,
000
Va
riouscr
edi
ts 1
,
500,
000
 
Ac
coun
tsrec
eiv
able 1
,
200,
000
Bi
ll
in
gsonc on
str
uct
ionc
ont
rac
t 1
,
200,
000
Ca
sh 1
,
000,
000
Ac
cou
ntsr
ece
iva
ble 1
,
000,
000
Costofconst
ructi
on 1
,
588,
889
Const
ruct
ioninprogre
ss(
los
s) 200,
000
Rev
enuefroml ong
-ter
mco n
tra
cts
* 1
,
388,
889
2009:
Constr
ucti
oninpr ogr
ess 1
,
300,
000
Var
iouscredi
ts 1
,
300,
000
Ac
coun
tsrec
eiv
able 1
,
300,
000
Bi
ll
in
gsonc on
str
uct
ionc
ont
rac
t 1
,
300,
000
Ca
sh 1
,
500,
000
Ac
cou
ntsr
ece
iva
ble 1
,
500,
000
Cos
tofconst
ruct
ion 1
,
211
,
111
Const
ruct
ioninpr
ogr
ess(
lo
ss) 1
00,
000
Rev
enuefromlong
-te
rmcontr
act
s** 1,
1
11,
1
11
Bi
l
li
ngsoncons
tru
cti
oncont
rac
t 2,
500,
000
Cons
tru
cti
oninprog
res
s 2,
500,
000

*P2,
500,000   (
P1,
500,
000/
P2,
700,
000)
**P2,500,
000   1,
388,
889

Pr
obl
emV
It
emt ocompu t
e An
swe
r
Totalre
venuerecognizeddu ri
ng2009(w): P50mil
li
on
CIPcontai
nscost+g rossprofi
t=reven
ue,sow=P50 P15mil
li
on
Grossprof
itrecogni
ze ddu r
ing2009(x)
:P50–P35=P1 5
Bil
li
ngsonc ons
truc
tion( y):
P14+P46=P60 P60mi
l
li
on
Netbil
li
ngsinexces
sofc ons
tru
cti
oninprogre
ss(
z):Bi
l
li
ngsofP60–CI
PofP50 P10mi
l
li
on
Calc
u l
atet
hepe rce
nta geofPACthatwascomple
tedduri
ng2009:
50/150=33. 33% 333.
33%
Pr
obl
emVI
It
emt oc ompute An
swer
Cashc ol
lect
edbyK PonCincyOn eduri
ng2009.(P75bil
l
ing
s–P10A/R) P65mil
li
on
Actua
lc ost
sincur
redbyKPonCi ncyOnedu r
ing2009(P66CIP–P22grosspof
it
) P44mi l
li
on
At12/31/2009,thees
ti
mate
dr emaini
ngcost
stocomplet
eCincyOn
e P156mil
li
on
(44/{
44+x })(
300–{ 44+x })=22;x=1 56
Thepe rcent
ageofCincyOnet h
atwacomplete
ddu ri
ng2009100x(44/{44+156}) 22%
 
Proble
mVI I
1.
Progr
essbi
ll
ing
sonc ons
tru
cti
onc
ont
rac
t P562,
000
Lessa
ccount
srecei
vabl
e 1
50,
500
Cashcol
lec
tedin20x4 P411
,
500
2.
Gr
osspr
ofi
tfr
omc
ons
tru
cti
onc
ont
rac
t+Con
str
uct
ioni
npr
ogr
ess=Re
ven
uef
or20x
4
 P301,
000+P602,000=P903,
000
P903,
000/P7,
525,
000=12% Per
cent
agecompl
et
edin20x4
P301,
000/
.1
2=P2,508,
333 Esti
matedi
ncomeoncons
tru
cti
oncon
tra
ct
Proble
mVIII
1.
Pe r
cent
ageofCompl
eti
onMe
thod(
Cos
t-t
o-c
ostAppr
oac
h)
20x 4  20x5 20x 6 
Contr
actpric
e. .
.
..
..
.
..
..
.
.
..
.
.. P250,000 P250,000 P250,000
Curre
ntyearc osts..
.
.
..
.
..
.
..
.
.. 1
10,000 120,000 1
5,000
Cost
stodate...
..
.
.
..
..
..
.
..
.
..
. 1
10,000 230,000 245,000
Est
imate
dc osttoc omplet
e..
.
.
..
. 100,000 20,000 0
Est
imate
dtota lcost.
..
.
..
.
..
.
..
. 210,000 245,000 240,000
Est
imate
dtota lgrossprof
it.
.
.
.. 40,000 5,000 5,000
Per
centcomple t
e...
.
..
.
..
.
..
.
..
.
. 52% 94% 1
00%
Rev
enuetoda te..
..
..
.
..
.
.
..
.
..
.
. P130,000 P230,000 P250,000
ToDa t
e  Pr
evi
ous  Curr
ent 
 
a
tDe c
.31 Year
s   Year
  
 
20x
4: Reve
n u
e P130,
000  P130,
000 
Cost
s( 1
10/21
0x21
0) 110,
000  110,
000 
Grossprof
it P20,000  P20,000 

20x
5: Reve
n u
e P235,
000  P1
30,000  P105,000 
Cost
s(230/245x245) 230,
000  11
0,000  120,000 
Grossprof
it(
los
s) P 5,000  P20,000  P(1
5,000)
20x
6: Reve
n u
e P250,
000  P235,
000  P15,000 
Cost
s 245,
000  230,
000  1
5,000 
Grossprof
it P 5,000  P 5,000  P 0 
20x
4  20x
5  
  20x
6 
1
. Revenuerec
og ni
zeddu r
ing
th
eye ar P1
30,
000 P1
00,
000  P1
5,000
2. Grossprofi
trecogni
zeddu ri
ng
th
eye ar 20,
000 (
15,
000) 0
3. Balanceint
hec onst
ruct
ionin
progres
saccountatDec.31. 1
30,
000 235,
000  0
4. Balanceint
hepr ogre
ss
bi
lli
ngsacc
ou n
ta tDec.
31. 1
25,
000 250,000  0
5. Net(3-4)or(4-3)–du ef r
om(du
eto) 5,
000 (1
5,000) 0
2.
Cos
tRe
cov
eryMe
thod
20x
4  20x
5  
  20x
6 
1
. Revenuerec
og ni
zeddu r
ing
th
eye ar P1
10,
000 P1
20,
000  P20,
000
2. Grossprofi
trecogni
zeddu ri
ng
th
eye ar 0 0 5,
000
3. Balanceint
hec onst
ruct
ionin
progres
saccountatDec.31. 1
10,
000 230,
000  0
4. Balanceint
hepr ogre
ss
bi
lli
ngsacc
ou n
ta tDec.
31. 1
25,
000 250,
000  0
5. Net(3-4)or(4-3)–du ef r
om(du
eto) (
15,
000) (20,
000) 0
Proble
mIX
1.
Pe r
cent
ageofCompl
eti
onMe
thod(
Cos
t-t
o-c
ostAppr
oac
h)
2005 2006 2007
Contr
actpric
e P250, 000 P250,000 P250,000
Curre
ntyearc osts 150,000 100,000 15,
000
Cost
stodate 150,000 250,000 265,000
Est
imate
dc osttoc ompl
ete 90,000 20,000 0
Est
imate
dtota lcost 240,000 270,000 265,000
Est
imate
dtota lgrosspr
ofi
t 10,000 (20,000) (15,
000)
Per
centcomple t
e 63% 93% 100%
Re
ven
uet
oda
te P1
57,
500 P232,
500 P250,
000
 ToDat
e  Pr
evi
ous  Curr
ent 
 
atDec
.31 Year
s   Year
  
 
2005: Reve
n u
e...
.
.
..
.
..
.
. P1
57,
500  P157,
500 
Cost
s( 1
50/240x240) 1
50,
000  150,
000 
Grossprofi
t.
..
.
.
..
.
..
.
. P 7,
500  P7,500 
2006: Reve
n u
e...
.
.
..
.
..
.
. P232,
500  P1
57,
500  P75,
000 
Cost
s..
..
.
..
.
..
.
. 252,
500  1
50,
000  1
02,
500 
Grossprofi
t(l
oss
)..
.
.
..
.
..
.
.
. P(20,
000) P7,
500  P(
27,
500)
2007: Reve
n u
e...
.
.
..
.
..
.
. P250,000  P232,
500  P1
7,500 
Cost
s..
..
.
..
.
..
.
. 265,000  252,
500  1
2,500 
Grossprofi
t(l
oss
)..
.
.
..
.
..
.
.
. P(1
5,000) $(20,
000) P5,
000 
20x
4 20x
5 20x
6
1.Con str
u ct
ioncosts(expense
)
re
c ognizeddu ri
n gtheyear P1
50,
000  P1
02,
500  P1
2,
500 
2.Gr osspr ofi
trecog ni
zeddu r
ing
theye ar 7,
500  (
27,
500) 5,
000 
3. Ba lanceinthec onstr
ucti
onin
pr ogressaccoun tatDec.31
(afterclosi
nge ntri
es) 1
57,
500  230,
000*  0 
4. Ba l
an ceinthepr ogres
s
bill
ingsaccou ntatDec.31. 1
10,
000 230,
000 0
5. NNe t(3-4)or( 4-3)–du efrom(
duet
o) 47,
500 0 0

Bal
ancei
naccoun
t sr
ece
iva
ble
atDec
.31(a
fte
rclosi
ngent
rie
s) 1
0,000  1
0,000  0 

*P1
50,
000+7,
500+1
57,
500+1
00,
000c
ost
sin
cur
reddu
rin
gth
eye
ar–27,
500l
oss

2.
Cos
tRe
cov
eryMe
thod
20x
4 20x
5 20x
6
1.Con str
u ct
ioncosts(expense
)
re
c ognizeddu ri
n gtheyear P1
50,
000  P80,
000*  P20,
000** 
2.Gr osspr ofi
trecog ni
zeddu r
ing
theye ar 0  (
20,
000) 5,
000 
3. Ba lanceinthec onstr
ucti
onin
pr ogressaccoun tatDec.31
(afterclosi
nge ntri
es) 1
50,
000  ***230,
000  0 
4. Ba l
an ceinthepr ogres
s
bill
ingsaccou ntatDec.31. 1
10,
000 230,
000 0
5. NNe t(3-4)or( 4-3)–du efrom(
duet
o) 40,
000 0 0

Bal
a nc
einaccountsrece
iva
ble
atDec.31(a
fte
rc l
osin
ge nt
rie
s) 1
0,000  10,
000  0 
*P100,000c os
tsincur
red–P20, 000e
sti
mat
edlos
s=P80, 000,
reve
nue–20x5
**P250, 000–P1 50,000,rev
enu e–20x4–P80,
000,rev
enue–20x 5
***P150,
000+P1 00,000–P20, 000
Mul
tipl
eChoicePr oblems
1.a
Cost
sincu rr
ede achyea r
(
2.5M+2. 0M+1M*+. 5M) P 6M
Add:Costi n
curredinpr ioryea
r s 0
Cost
sincu rr
edtoda t
e P 6M
Add:Esti
ma tedcosttoc omplet
e
Totales
tima t
edc os
ts P18M
Perc
e n
tag eofcompl e
tion 6M/1
8M
Adminis
trati
vecostaslon gasrei
mbur sabl
eisi
ncl
ude
dint
hec
ons
tru
cti
onc
ost
s.
Marketi
ngc ost
sarec onsidere
da sexpense
s.
Depreci
ationofidleequipme nti
sc har
gedtoexpe
nse
s.
2.b
P7,
200,
000
———————————x(
P15,
000,
000–P1
2,
000,
000)=P1
,
800,
000.
P7,
200,
000+$
4,800,
000
3.c
P1,
170,
000
—————-x( P3,
300,
000–P1
,
950,
000)=P81
0,000
P1,
950,
000
(
P3,
300,
000–P2,
010,
000)–P81
0,000=P480,
000.
4.b P1
,200,
000
————— x( P7,
200,
000–P4,
800,
000)=P600,
000.
P4,
800,
000
5. c P7,
200,
000–P4,
875,
000=P2,
325,
000.
6. a
20x4
Contrac
tPrice P4,
800,
000
x:Perc
entage-of-comple
ti
on _______75%
Recogni
zedRe venuetodate P3,
600,
000
Less
:Costsi
nc ur
redtoda t
e P3,
400,
000
GrossProfi
ttoda t
e P200,000
Less
:GPi nprioryear _______-0-
Grossprofi
tinc ur
rentyear P200,000
7. a P3,
600,
000
—————x( P8,
400,
000–P6,
000,
000)=P1
,
440,
000.
P6,
000,
000
8. b P8,
400,
000–P5,
600,
000=P2,
800,
000.
9. a [
P1,
950,
000÷( P1
,
950,
000+P1,
300,
000)
]×P2,
250,
000=P1,
350,
000
(P5,
500,
000–P3,
350,
000)–P1,
350,
000=P800,
000.
1
0.c P5,
500,
000–P3,
350,
000=P2,
1
50,
000.
1
1.a-Gr
osspr
ofi
tisr
ecog
nize
dint
heye
arofs
ale
,20x
4;t
her
efor
e,i
n20x
6nog
ros
spr
ofi
tsh
oul
dber
eal
i
zed.
1
2.a
Contrac
tPrice P6,
000,
000
Les
s:TotalEst
imatedCos ts
CostsInc
urred-1/10/x4to12/
31/x
5 P3,
600,
000
Add: Es
ti
ma t
edc oststocompl
ete 1
,
200,
000 4,
800,
000
Les
s:Costsi
ncurredtoda te P1
,
200,
000
Mult
ipl
iedby: % ofc ompleti
on ___3.
6/4.
8
GrossProfi
ttodate P900,
000
Les
s:GPi npri
orye ar(giv
en) ___600,
000
Grossprofi
tincurre
n tyear P300,
000
1
3.b
20x4:Cos
ttodat
e–P7,500,
000x20% P1
,500,000
20x5:Cos
ttodat
e–P8,000,
000x60% 4,800,000
Cos
tinc
urre
dduri
ng20x5 P3,
300,
000

1
4.c P7,
440,
000.
30=P2,
232,
000.

1
5.d (
P7,
200,
000.
75)–(
P7,
1
00,
000.
30)=P3,
270,
000.

1
6.b (
P7,
440,
000.
75)–(
P620,
0008)=P620,
000de
bit
.

1
7. c P7,440,
000.25=P1,
860,
000
P7,
500,000–(P7,
200,
000.75)=P2,
1
00,
000.

1
8.b (
P9,
000,
000–P8,
250,
000)(
P3,
795,
000÷P8,
250,
000)=P345,
000.
1
9. c P3,
795,
000+P345,
000=P4,
1
40,
000.
20.c P600,
000
—————————— x( P1
,500,
000–P1
,
000,
000)=P300,
000
P600,
000+P400,000
(
P1,
500,
000–P1
,
050,
000)–P300,
000=P1
50,
000.
21
. b P240,
000–P1
00,
000=P1
40,
000.
22.d P300,
000–P60,
000=P240,
000
P240,
000
————————— x( P2,
400,
000–Tot
ale
sti
mat
edc
ost
)=P60,
000
Tota
les
ti
mat
edc
ost
Tot
ale
sti
mat
edc
ost=P1,
920,
000
P2,
400,
000–P1,
920,
000=P480,
000.
23. b (
P25,
000,
000×.
60)–(
P22,
500,
000×.
25)=P9,
375,
000.
24. b P5,
600,
000–(
P2,
560,
000+P3,
280,
000)=–P240,
000.
25. c (
P6,
325,
000÷P1
3,750,
000)×P1
,
250,
000=P575,
000.
26. a (
P6,
325,
000÷P13,
750,
000)×P1
,
250,
000=P575,
000.
P6,
325,
000+P575,
000=P6,
900.
000.
27.
d-P85Mc ost
sincu
rredin201
1=r e
venu
erecog
nize
din201
1.Unde
rth
ec os
tsre
cov
ery(
zer
o-prof
itapproac
h)
ofcons
truct
ionaccoun
tin
g,r
eve
nueisrec
ogni
zeduptoth
ee x
ten
tofcost
sin
curr
edasl
ongasitisproba
ble
wi
llberecov
e r
abl
e.
28. c P3,
200,
000–P2,
1
50,
000=P1
,
050,
000.
29. c P1
,
500,
000–P820,
000=P680,
000.
30.Noans
we rav
ail
able
.Unde
rPFRS,t
heexce
ssofCons
tru
cti
onInProgr
essa
moun
tin
gt oP2,
100,
000(
P2,
250,
000
–P1
50,000,l
oss)–P1
,
900,000,
bil
li
ngs=P200,
000iscl
ass
if
ie
da sduef
romcus
tomers
.
Un
dert
heUSFAS
B,t
hee
xce
ssofP200,
00i
scon
side
reda
sani
nve
ntor
yac
cou
nt.
31
. b (
P9,
600,
000×45% )–(
P9,
000,
000×1
5% )=P2,
970,
000.
32.d
Undert
heperc
ent
ageofcompl
et
ionmet
hod,theConst
ruc
tion
-In-Pr
ogr
essacc
ou n
tisuse
dforc
osti
ncu
rre
d
dur
ingt
heye
arandanyre
a l
i
zedgros
spr
ofi
t(l
oss
).Th
efoll
owingT-ac
coun
tisprepare
d:
Constr
uct
ion
-In
-Pr
ogr
ess
CIi
n2004 210,
000
RGPin20x
4(?) 34,000
Endof20x
4 244,000
CIi
n20x5 384,000
RGPin20x
5(?) 1
00,000
En
dof20x
5 728,
000
33. d P3,
500,
000–P1
,
350,
000–P1
,
525,
000=P625,
000.
34.
c
Cos
tsofc
onstr
uct
ion 1
,
200,
000
Con
str
uct
ioninprogr
ess 800,
000
Rev
enueforl
ong-ter
mcon
tra
cts 2,
000,
000
 Perce
ntagecomplet
e=P1 ,
200,000/(P1,
200,
000+P600,
000)=2/
3
Revenu
er e
cognize
d=2/ 3 P3, 000,
000=P2,000,
000
Costrecog
nized=P1 ,
200,
000
Grossprof
itre
cognized=P2,000,000 P1 ,
200,
000=P800,
000

35.a
Costsofcons
truc
ti
on P1
,
200,000
Prof
it 800,000
Constru
cti
onInProgre
ss P2,
000,
000
Less
:Progres
sbil
li
ngs 1,
500,000
Excess(
Du efr
omc us
tomer
s) P 500,000
36.
b
Cos
tsofc
onstr
uct
ion 600,
000
Con
str
uct
ioninprogr
ess 400,
000
Rev
enueforl
ong-ter
mcon
tra
cts 1
,
000,
000
Totalreve
nueP3,000,000 r eve
nuepr
evi
ous
lyre
cog
nize
dP2,000,
000=Re
ven
uet
o
r
ecogni
zethisyearP1
,000,
000.
Costrecogni
zed=P600, 000
Grossprofi
trec
og ni
zed=P1 ,
000,
000 P600,000=P400,000
37.d
Cos
tsofc
ons
tru
c t
ion 1
,
200,
000
Rev
enuef
orlong-t
ermc
ont
rac
ts 1
,
2000,
000
Un
derc
ostr
ecov
eryme
thod,
rev
enu
esh
oul
dber
ecog
nize
dupt
oth
eex
ten
tofc
ost
sin
cur
red.

38.b
Costsofcons
tru
cti
on P1
,
200,000
Prof
it 0
Constru
cti
onInProgre
ss P1
,200,
000
Less
:Progres
sbil
li
ngs 1,
500,000
Excess(
Du etocus
tomers
) P(300,000)
39.d
Cos
tsofc
onstr
uct
ion 600,
000
Con
str
uct
ioninprogr
ess 1
,
200,
000
Rev
enueforl
ong-ter
mcon
tra
cts 1
,
800,
000
Undert
hecostr
ecove
ryme t
hod,r
ecor
de qualamou
ntsofre
ven
uea n
dc os
tunt
ilcos
tre
cove
red,a
ndt he
n
rec
ordgros
sprofi
t.In2008,rec
ordedr e
venu
ea ndcostofP1,
200,
000,sor e
cordremai
ni
ngc os
tof
P600,
000andal
lgrosspr
ofi
tofP1
,
200,000in2009.

40.
a
20x4 20x 5
Contra
ctpric
e P9,
600,
000 P1
0,080, 000
Cost
sincurr
edt oda t
e P4,
920,
000 P8, 640, 000
Add:Est
imatedcosttoc ompl et
e 4,
920,
000 2,160,000
Totales
ti
ma t
edc osts P9,
840,
000 P1 0,800, 000
Est
imatedGrossProfit(loss) P(
240,
000) P ( 720, 000)
Mult
ipl
yby: % ofc ompl e
tion 1
00% 100%
Recogni
zedGr ossProfit(Loss
)todat
e P(
240,
000) P( 720, 000)
Les
s:GrossProfi
t(Loss)inpr i
oryea
r (240, 000)
________
_
Re
cog
nize
dGr
ossPr
ofi
t(L
oss
)inc
urr
entye
ar P(
240,
000) P( 480, 000)
% ofCompl
et
ion/Cos
tRe
cov
eryMe
thod:
Con
str
uct
ioni
nPr
ogr
ess Pr
ogr
essBi
l
li
ngs
CI 4,
920,
000 240,
000l
oss 5,
280,
000
4,
680,
000 5,
280,
000
CI 3,
720,
000 480,
000l
oss 3,
420,
000
7,
920,
000 8,
700,
000
du
etoc
ust
omers
P780,
000
Not
e:I
fth
erei
sana
nti
ci
pat
edl
oss
,th
eCon
str
uct
ion
-in
-Pr
ogr
essf
orbot
hme
thodswi
l
lex
act
lybet
hes
ame
 i
nth
eye
art
hel
osswa
sin
cur
red.
41
.a
I
nputMe
asur
es:
Eff
ort
s-Ex
pende
dMe
thod-us
ingt
imbe
rsl
ai
d
Ye
ar2 Ye
ar3
Timerslai
dEac hYear 300 500
Add:Timberslai
di nPri
orYears 1
50 450
Timberslai
dtoda te 450 950
Add:Additi
onalsupportti
mberst
obel
ai
d 520 -0-
TotalEst
imate
dTi mbe rs 970 950
Perc
e nt
age-of
-Compl eti
on 45/97 1
00%
x:CONTRACTPRI CE P800,
000 P800,
000
Recogni
zedRev en
u etoDate P371,1
34 P800,
000
Recogni
zedRev en
u ei
nPr i
orYear
s 371,
134
Recogni
zedRev en
u ei
nCu rre
ntYr. P428,
866
Out
putMe
asur
es–Numbe
roft
rai
lfe
et
Ye
ar2 Ye
ar3
Trai
lfeetEachYe ar 7,500 8,000
Add:Trailfe
esinPriorYears 3,000 1
0,500
Trai
lfeettoda t
e 1
0,500 1
8,500
Add:Additi
onaltrai
lfee
ttobec onst
ruc
ted 8,200 ___-0-
TotalEst
imatedTr ai
lfee
t 1
8,700 1
8,500
Perc
e nt
age-of-Compl e
ti
on 1
05/ 1
87 100%
x:CONTRACTPRI CE P800,000 P800,000
Recogni
ze dRevenuetoDa t
e P449,1
98 P800,000
Recogni
ze dRevenueinPri
orYe ar
s 449,1
98
Recogni
ze dRevenueinCurrentYr. P350,802
42.d
Perce
ntageofCompl
eti
on: Proje
ct6 Pr oje
ct7 Pr
oject8
Contra
ctpri
ce…………………………. . P500,000 P700, 000 P250,000
Costi
ncurre
de a
chyea
r………………. P375,000 P100,000 P100,000
Add:Costi
ncur
redi
npriorye
ar……… _______ _______ ________
__ _
Cost
sinc
urr
edtodat
e………………… P375,000 P100,000 P100,000
Add:Es
ti
matedc
ost
stocompu
te……. _______ 400, 000 100,000
_
Totale
stimat
edc osts…………………. P375,000 P500, 000 P200,000
Est
imatedgrossprofit………………… P1
25,000 P200, 000 P50, 000
Mult
ipl
yby: percentageofcomplet
ion
. 100% 20% 50%
Rec
o gn
izedg r
osspr ofitt
odate……… P1
25,000 P40, 000 P25, 000
Les
s:Recogn
izedg rossprofi
tinpri
oryea
rs _______ _______ ________
__ __ _
Re
cog
nize
dgr
osspr
ofi
tea
chye
ar…. P1
25,000 P40, 000 P25,000
Cos
tRe
cov
eryMe
thodofCons
truc
ti
onAc
count
ing:
Pr
oje
ct6 Proje
ct7 Pr
oje
c t8
Re
cog n
izedReve
nu e
………..……….. P500,
000* P100,000 P100,
000
Le
ss:Cost
soflong-t
e r
mc onst
ruc
tion
contra
ct……………………………. . 375,000 100,
000 100,
000
Re
cog n
izedgros
spr of
ite
a c
hye a
r…. P125,
000 P 0 P 0
*S
inc
ethec
ont
rac
tisc
ompl
et
edt
hent
hef
ulla
mountofP500,
000c
ont
rac
tpr
ices
houl
dber
ecog
nize
dasr
eve
nue
.

Pe
r c
entag
eofCompl
eti
on Cos
tRec
over
yMe thodofConstr
uct
ion
Const
ructi
oninPr
ogr
ess Const
ructi
oninProgres
s
Pr.6-Cl . 375,000 500,000Pr
.6 Pr.6- Cl. 375, 000 500,000Pr
.6
Pr. 125,
000 Pr. 1 25,000
Pr.
7–Cl . 100,
000 Pr.7–CI 1 00,000
Pr. 40, 000 Pr.8–CI 1 00,000
Pr
.8.Cl 1 00,
000 700,000 500,000
Pr. 100,
000 1
2/31 200, 000 (d)
765,
000 500,000
 1
2/31 265,
000 (
d)

43.b
2006 2007 2008
Contra
ctpr i
ce…………………………. . P5,
000,
000 P5,
000,
000 P5,
000,000
Costin
cu r
rede achye ar………………. P2,
050,000
Add:Costincurr
e dinpr i
orye ar……… 900,000 2,
550,000
Costsi
ncurredtoda te………………… P 900,
000
P2,
550,000 P4,
600,000
Add:Est
ima t
edc ostst oc omplete 1,
700,000 -0-
Totales
timatedc osts…………………. P4,
250,000 P4,
600,000
Est
imatedg r
osspr ofit………………… P 750,000 P 400,000
Mult
ipl
yby: pe r
ce ntageofc omple
tion
. 60% 1
00%
Recogni
zedg rosspr ofittoda te
……… P1
00,
000 P 450,000 P 400,000
Les
s:Recogni
ze dg rosspr ofiti
npr i
oryea
rs -0- 1
00,000 450,000
Recogni
zedg rosspr ofite a
chye ar
…. P1
00,
000 P350, 000 P(50,000)
44.
d–ref
ert
oNo.43
45.
c–r
efert
oNo.
18
46.
d–re
fert
oNo.1
9
47.
c
Pr
ioryea
r Cu
r r
entye
ar
Contractpri
c e
………………………………………. P7,
000,000 P7,
000,
000
Costincurr
ede achye ar…………………………. .
Add:Cos ti
ncurredinpr iorye ar
………………….
Costsi
nc ur
redt oda te……………………………. . P5,
000,000
Add:Esti
ma t
e dcostst oc ompl et
e……………… 2,800,
000
Totalest
imatedc osts………………………………. P7,800,
000
Est
imatedg rossprofit(los s
)………….……………. (
P800, 000)
Multi
plyby: percentageofc ompleti
on……….
. _____1 00%
Recogni
ze dg r
osspr ofit(loss)t
oda t
e………….. P600,
000 (
P800, 000)
Les
s:Recognizedg rosspr ofi
tinpri
oryears
……. ___600,000
Recogni
ze dg r
osspr ofite achyear…………….. (
P1,
400,000)
48.c
ContractPr
ice
……………………………………………… P60,
000,000
Less
:TotalEst
imatedCos t
s
CostInc
urredtoDa te……………………………… P26,
000,000
Add:Est
ima t
edCos t
stoComplet
e……………… 25,000,
000 51 ,000,000
Es
ti
ma tedGrossProfi
t……………………………………. P9,000,000
Mul
ti
pliedby:% ofc ompleti
on…………………………. 30%
Re
cog n
izedgrossprofi
ttodate……………………….. P2,700,000
Le
ss:RGPinprioryears…………………………………… _________0
Re
cog n
izedgrossprofi
tincurr
entye
ar……………… P2,700,000
Cons
tru
cti
on-in
-progres
sAc
cou
nt:
Cos
tsinc
urr
edt odat
e………………………………….
. P26,000,000
GPinthecur
rentye
ar…………………………………… 2,700,000
P28,
700,
000
Le
ss:
Prog
ressbi
ll
i
n g
s…………………………………….. 5,
000,000
Duefr
omc u
stomer(ne
t)………………………………. P23, 700,
000
49.
c
Co
ntrac
tPri
ce P1
00,000,
000
Mul
ti
pli
edby:Gr
ossPr
ofi
tRa
te _________2
5%
Es
ti
matedGrossProf
itoft
heenti
recontr
a c
t P25,000,
000
Mul
ti
pli
edby:Perc
e n
tageofComple
tionforfi
rs
tye
ar _________5
0%
Gr
ossPr
ofi
tre
ali
zedf
orc
urr
entye
ar P12,
500,
000

50.c
Cont
rac
tPrice P1
20,000,000
x:
Mobil
iza
tionFe
e 1
0%
Col
le
cti
onin20x4 P12,
000,000
 Not
e:Bi
l
li
ngsf
or20x
4wi
l
lbec
oll
ect
edi
nJa
nua
ry20x
5.
51
.a
Mobi
li
zati
onFe e
: 5% xP1 0M P5.0M
Col
le
cti
ononBi l
li
n gs
:
Con t
ractprice P100M
x:Progressbil
l
ings,n
etof10% and8% (50% -1
0% -8% ) 32%
Progres
sbi l
li
ngs P32M
x:Coll
ectionsnetofcon
tra
c tr
ete
nti
onof1
0% 90% 28.
8M
Col
le
cti
onsin20x 4 P33.
8M
52.
b–c
ostrec
overymeth
odisus
ed.
Atthee ndof20x4thecontr
act
ormustr
ecog
nizedonlytotheext
entofrec
ove
rabl
econt
rac
tcos
ts
inc
urre
d( i
.
e.
,P5,
000cont
rac
treve
nuea
ndP5,
000c ons
truc
ti
onc
osts
/ex
pens
es)
.
Theor
ies
1. Fals
e 6. Fa
lse 1
1. Fa
lse 16. Tru
e 21
. Tr
ue 26. c 31
. d
2. True 7. Fal
se 1
2. Tru
e 17. Fal
se 22. Fal
se 27. b 32. c
3. True 8. Fal
se 1
3. Fal
se 1
8. Tru
e 23. Fal
se 28. c 33. b
4. Fals
e 9. Tru
e 1
4. Tru
e 1
9. Fal
se 24. Fal
se 29. b 34. d
5. Fals
e 1
0, Fal
se 1
5, Fal
se 20. Tru
e 25. b 30. a 35. c
36. d 41
. c
37. b 42. b
38. a 43. a
39. c 44. d
40. d 45. c