Prob.

1
MM Construction Company was awarded a contract to construct a sewage system for Maynilad for 32,500,000.
The original estimate of the cost to complete the project was 30,000,000. The contract provides for periodic progress
billings. A final billing equal to 25% of the CP is to be made upon final inspection and acceptance by Maynilad. The
record was follows:
Date Cost incurred to date Est. cost to complete
12/31/2021 10,750,000 16,125,000
12/31/2022 26,250,000 7,500,000
8/15/2023 34,250,000
The construction was inspected on Aug. 15, 2021, Jan. 15, 2022, and Oct. 1, 2022, and PB equal to 25% of the CP were
made on each of these dates. The system was completed, and final inspection and acceptance took place on Aug. 31,
2023. CIP net of PB in 2022 ____________________________

Prob. 2
MM Cons. Company began operation on Jan. 2, 2023. During the year, the company entered into a contract with
TT to construct a manufacturing facility. At that time, MM estimated that it would take 5 years to complete the facility at
a total cost of 18,000,000. The total CP for the construction is 25,000,000. During the year, the company incurred
4,400,000 in construction cost related to the project. The estimated cost to complete the contract is 15,600,000. TT was
billed and paid 30% of the CP. Using POC, how much is the CIP or PB ____________________________

Prob. 3
MM Cons. Inc. entered into a construction contract in 2022 that called for a contract price of 9,600,000. At the
beginning of 2023, a change order increased the initial CP by 480,000. The company uses POC method for completing
the project, the ff. data is available:
2022 2023
Cost incurred to date 4,920,000 8,640,000
Est. cost to complete 4,920,000 2,160,000
RGP/(RGL) to be recognized for 2022 _____________________ and 2023 ______________________

Prob. 4
MM works on a 70 million contract in 2023 to construct a mall. During 2023, MM uses the POC method of
revenue recognition. At Dec. 31, 2023, account balances were:
CIP 24,500,000
AR 2,400,000
Contract billings 12,000,000
Est. cost to complete 31,850,000
Actual cost incurred for 2023 _______________________

Prob. 5
In 2021, MM Builders agreed to construct a commercial building at a price of 10,000,000. MM uses POC method
of recognizing revenue from LTC projects. Data were as follows:
2021 2022 2023
Cost incurred each year 2,800,000 3,200,000 1,850,000
Est. cost to complete 5,200,000 2,000,000 -
Billings to date 1,500,000 4,000,000 10,000,000
Collections 1,200,000 3,200,000 9,400,000
RGP in 2022 _____________________
Balance of CIP net of PB ____________________
If ZPM, balance of CIP over PB _______________________

Prob. 6
MM recognized RGP of 315,000 on its LTC projects that has accumulated cost of 612,500 for the year. To finish
the project, MM estimates that it has to incur additional cost of 1,225,000. Billings were made 40% of the CP. What was
the balance of CIP account net of PB? ______________________