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Long Term Construction: Question #11 Page 265

The document discusses a long term flood control construction project by JJD Construction Co. that was started in 2015 and completed in 2016. It provides cost details as of June 30, 2015 and June 30, 2016, showing costs incurred to date and estimated total costs. Using the percentage of completion method, the project was 97.5% complete on June 30, 2015 and 77.5% complete on June 30, 2016.

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296 views1 page

Long Term Construction: Question #11 Page 265

The document discusses a long term flood control construction project by JJD Construction Co. that was started in 2015 and completed in 2016. It provides cost details as of June 30, 2015 and June 30, 2016, showing costs incurred to date and estimated total costs. Using the percentage of completion method, the project was 97.5% complete on June 30, 2015 and 77.5% complete on June 30, 2016.

Uploaded by

lanimfa dela cruz
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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LONG TERM CONSTRUCTION

Question #11 Page 265

The following information relates to a flood control project of JJD Construction Co. which was started in
2015 and completed in 2016:

Cost incurred to date: Estimated total cost on completion


As at June 30, 2015 P 9,750,000 As at June 30, 2015 P 19,500,000
As at June 30, 2016 P15,750,000 As at June 30, 2016 P 20,250,000

The project is a 22,500,000 fixed price construction contract and JJD uses the percentage of completion
method of revenue accounting. On June 30, 2016, how much income would JJD report on the project?

a. 250,000
b. 300,000
c. 750,000
d. 900,000

Answer: A
06/30/15 06/30/16
Contract Price 22,500,000 22,500,000
Less: Total estimated Costs 19,500,000 20,250,000
Estimated Gross profit 3,000,000 2,250,000
Multiplied by: Percentage of completion 9750/19500 15750/20250
Recognized gross profit to date 1,500,000 1,750,000
Less: recognized gross profit in prior year - 1,500,000
Recognized gross profit each year 1,500,000 250,000

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