Ben Co is in the business of fabricating and installation of windows for residential and commercial

establishments. On July 1, 20x3, the company entered into a contract for 100 custom windows with XYZ
Co at a total cost of P200,000. The contract agreement stipulates that the fabrication and the installation
of the windows should be completed within a span of 8 months. The contract further stipulates for each
day before the set deadline that the project is completed, the contract price will increase by P1,000 per
day. For each day after the deadline that the project is not completed, the promised consideration will be
decreased by P1,500 per day.

On December 31, 20x3, Ben Co determined that the “expected value” better predicts the variable
consideration it will receive regarding the early completion or delay of the project because of the different
outcomes possible. The Co estimates that it is 60% likely to complete the project 10 days ahead of
schedule and receive an incentive, 25% likely to complete the project on time and 15% likely to complete
the project five days past schedule and incur a penalty.

1. If on December 31, 20x3, the company has already fabricated and installed 60 windows,
determine the revenue to be recognized by the company on December 31, 20x3.

ABC Company sells computer hardware and software to their customers. On November 1, 20x3, the
Company enters into a contract to sell 60 computers to Conrad Little Giant Company at P30,000 per
computer. Answer following independent situations.

2. The price of each computer is P30,000. It is the company’s policy to give a 10% volume
discount to all orders above 40 computers. As of December 31, 20x3, the company already
delivered 50 computers. Determine the revenue to be recognized by ABC Company.

3. The contract price of P30,000 per computer also requires ABC Company to sell and install
a computer program to each computer sold. If sold separately, ABC normally charges P500
for each installation and P 2,000 for each computer program to be installed. As of December
31, 20x3, ABC has already delivered 40 computers, but has only installed computer
programs on 1/2 of the computers delivered. Determine the revenue to be recognized by
ABC Company.

4. The price of each computer is P30,000. The contract agreement also stipulates the
following payment terms: 30% down payment upon contract signing, 40% payment when
30 computers have already been delivered and the balance upon completion of the order.
As of December 31, 20x3 ABC has already delivered 40 computers, determine the unearned
revenue to be reported by ABC on December 31, 20x3.

5. The price of each computer is P30,000. ABC has already delivered 20 computers, determine
the revenue to be recognized by ABC Company.

ESELYU is a university that charges a tuition fee of P12,000 per student for a 6-week academic course.
Classes have started 4 weeks ago and 1,000 students have enrolled. Students are required to pay their
tuition fees upon enrolment.

6. How much is the revenue to be recognized by ESELYU?

7. How much is the unearned revenue of ESELYU?

JOSEPH COMPANY enters into a contract to train the employees of a certain organization on advisory
services. The 20-hour course will take four weeks to complete. JOSEPH is to charge the company P1,000
per hour. 20 employees joined the course. After three weeks, 16 hours have already been rendered by
JOSEPH. Payment to Joseph will only be made at the end of the course.
8. How much will Joseph receive from the engagement?
9. How much revenue is already earned by Joseph?
10. How much is the unearned revenue of Joseph?