AST-GW

Problem 1

2009 2010 2011

Contract price P250,000 P250,000 P250,000
Current year costs  110,000  115,000   15,000
Costs to date  110,000  225,000  240,000
Estimated cost to complete  100,000   20,000        0
Estimated total cost  210,000  245,000  240,000
Estimated total gross profit   40,000    5,000   10,000
Percent complete       52%      92%     100%
Revenue to date P130,000 P230,000 P250,000

To Date Previous Current

at Dec. 31 Years Year
2009: Revenue P130,000 P130,000
Costs  110,000  110,000
Gross profit P 20,000 P 20,000
2010: Revenue P230,000 P130,000 P100,000
Costs  225,000  110,000  115,000
Gross profit P  5,000 P 20,000 P(15,000)
2011: Revenue P250,000 P230,000 P 20,000
Costs  240,000  225,000   15,000
Gross profit P 10,000 P  5,000 P  5,000

2009 2010 2011

1. Revenue recognized during the year P130,000 P100,000 P20,000
2. Gross profit recognized during the
year  20,000  (15,000) 5,000
3. Balance in the construction in progress
account at Dec. 31  130,000 230,000 0
4. Balance in the progress billings
account at Dec. 31  125,000  250,000 0

Problem 2

2009 2010 2011

Contract price P250,000 P250,000 P250,000
Current year costs  150,000  100,000   15,000
Costs to date  150,000  250,000  265,000
Estimated cost to complete   90,000   20,000 0
Estimated total cost  240,000  270,000  265,000
Estimated total gross profit   10,000   (20,000)   (15,000)
Percent complete      63%      93%   100%
Revenue to date P157,500 P232,500 P250,000

To Date Previous Current

at Dec. 31 Years Year
2009: Revenue P157,500 P157,500
Costs   150,000  150,000
Gross profit P  7,500 P  7,500
2010: Revenue P232,500 P157,500 P 75,000
Costs  252,500  150,000  102,500
Gross profit  P(20,000) P  7,500  P(27,500)
2011: Revenue P250,000 P232,500 P 17,500
Costs  265,000  252,500   12,500
Gross profit  P(15,000)  P(20,000) P  5,000

2009 2010 2011

1. Construction costs (expense) recognized
during the year P150,000 P102,500 P12,500
2. Gross profit recognized during the year 7,500 (27,500) 5,000
3. Balance in the construction in progress
account at Dec. 31 (after closing entries) 157,500 230,000 0
4. Balance in accounts receivable at Dec. 31
(after closing entries) 10,000 10,000 0