Integrity Corporation started work on a construction contract in 2021. The contract price is P40M. However cumulative inflation reaches or exceeds 26%, the contact price shall be adjusted upwards by 10%. Cost esca on the contracts are probable as to recovery. Additional information on the contract is shown below: 2022 P18,000,000 6,000,000 26% Cost incurred to date Estimated cost to complete Cumulative inflation rate 2021 P9,600,000 14,400,000 18%
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How much is realized profit in 2022?
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- 8. How much is the Gross Profit/Loss Realized in 2018? * Triple Take Construction Co. began construction of a project in 2017 for a contract price of P9,600,000. The project is to be completed in 4 years or in the year 2021. The following are the details regarding the construction project 2017 2018 2019 Costs inenered to dnte Estimsted cost to complete Progess Billings to dnte Cash Collectiona for the year 2160,000 4,500,000 7,520,000 6840,000 5,500,000 1,690, 000 2,304,000 4,320,000 7,680,000 1,728.000 3,240,000 5,760,000 9. How much is the Gross Profit/Loss Realized in 2019? * Xurpas Homes entered into a construction agreement in 2018 for the construction of condominium buildings. The original contract price was P20,000,000 but a change order was issued in 2019 that increases the price by P2,000,000. The percentage of completion method is used by the company in recognizing revenue. The following are information regarding the company. 2018 10,200,000 10,200,000 9,800,000 8,760,000…Hh1. In 2020, Solid Construction Co. (SCC) began work on a two-year fixed-price contract project. SCC uses the percentage-of-completion method to account for such projects and provides you with the following information (dollars in millions): ACCOUNT RECEIVABLE (FROM CONSTRUCTION BILLINGS) $37.5 ACTUAL CONSTRUCTION COSTS INCURRED IN 2020 $135 CASH COLLECTED ON PROJECT DURING 2020 $105 CONSTRUCTION IN PROGRESS, 12/31/2020 $207 ESTIMATED PERCENTAGE OF COMPLETION DURING 2020 60% How much cash remains to be collected by SCC on the project?Initial project set-up costs are estimated to be SEK15m (year 0-2023). Further estimated operating costs and projected revenues are as follows: Operating costs - Years 1-5 (2024-2028) All figures are in millions of SEK. Further costs are presented in the table below. No inflationary adjustments have been made Year Operational costs Maintenance costs Tech update costs Y1 6 Year Revenue (merchant fees) 4 3 Y2 6 Y1 8 4 3 Important points to note (after year 1): • Operational costs are estimated to increase by 3.5% per year • Maintenance costs are estimated to increase by 2.8% per year • Tech update costs are estimated to increase by 2% per year Revenue - revenue projections have been estimated as are follows: Y2 20 Y3 6 4 3 The discount rate used by BioMet is 4.5% per annum. Task Y3 22 in Y4 6 4 3 Y4 25 the Y5 6 4 3 Y5 30 table. 1. Prepare a cashflow forecast and use investment appraisal techniques to calculate Net Present Value (NPV), Return on Capital (ROC) and Payback Period (PB) for…
- On February 20, 2022, ABC Construction Company entered into a fixed-price contract to construct a commercial building for P9,000,000. ABC determined that the performance obligation is satisfied over time. Information relating to the contract is as follows: 2022 2023 25% 75% Percentage of campletion Estimated costs at completion P6,750,000 P7,200,000 How much is the contract costs charged to profit ar loss in 2022?Paul Constructions has entered into a contract beginning January 1, 2020, to build a pool. It has been estimated that the pool will cost P300,000, and will take three years to construct. The pool will be billed to the purchasing at P450,000. The following data pertain to the construction period. 2020 135,000 165,000 2021 210,000 90,000 2022 0 Cost to date: Estimated cost to complete. Progress billing to date. Cash collected to date 135.000 120.000 275.000 250,000 450,000 450.000 During 2020, Costs incurred include P15,000 standard materials stored at the site to be used in 2022 to complete the project. Using the percentage of completion method, compute the recognize gross profit for 2022: a. 52,500 b. 45,000 c. 97.500 d. 150,000 2. The CIP net of Progress billing is a. 27.500 current liability b. 32,500 current asset c. 167,500 current asset. d. 102,500 current liabilityHow much is the Gross Profit/Loss Realized in 2018? Triple Take Construction Co. began construction of a project in 2017 for a contract price of P9,600,000. The project is to be completed in 4 years or in the year 2021. The following are the details regarding the construction project: 2017 2018 2019 Costs incurred to date 2160,000 4,500,000 7,520,000 Estimated cost to complete Progress Billings to date Cash Collections for the year 6,840,000 5,500,000 1,880,000 2304,000 4,320,000 7,680,000 1,728,000 3,240,000 5,760,000
- Suppose that a contract is started on January 1, 2018, with an estimated completion date of December 31, 2019. The final contract price is P1,500,000. In the first year covering January 1 to December 31, 2018: Cost incurred amounted to P600,000. Half the work on the contract was completed. Certificates of work completed have been issued to the value of P750,000. It is estimated with reasonable certainty that further costs to completion in 2019 will be P600,000. Requirements: 1. The contract is certified at what percentage of completion? 2. At Dec 31, 2018, the entity will recognize how much profit? 3. At Dec 31, 2018, the entity will recognize how much contract asset?ABC Co. entered into a long-term construction contract for 3 years. Contract price agreed was P8,300,000. The outcome of the contract was estimated reliably. The following data were ascertained for the contract: Percentage of completion Estimated costs to complete How much is the costs of construction for 2022? O 7,920,000 Ⓒ6,240,000 O 8,957,500 O 6,467,500 2021 30% P 3,920,000 2022 82.5% P 1,680,000Rogers Ltd. has entered into a contract beginning in February 2020 to build two warehouses for ocean Ltd. The contract is a non-cancellable fixed price contract for $9.4 million. The following data pertain to the construction period. 2020 2021 2022 Costs for the year $3,285,000 4,015,000 1,800,000 Estimated costs to complete 4,015,000 1,825,000 -0- Progress billings for the year (non-refundable) 2,960,000 3,440,000 3,000,000 Cash collected for the year 2,605,000 3,490,000 3,305,000 a) Using the percentage-of-completion method, calculate the percent complete for each year of the contract. b) Calculate the amount of the gross profit to be recognized each year of the contract. c) Prepare the journal entries for 2020 and 2021. (Use Materials, Cash, Payables for costs incurred to date.) d) What is the balance in the Contract Asset/Liability account at December 31, 2020 and 2021? Show how the construction contract would be reported on the SFP…
- Dhofar water is installing new equipment at a cost of 140000 OMR. Expected cash flows from this project over the next three years will be 95000 OMR , 80000 OMR and 65000 OMR. The company's discount rate for such projects is 10 percent. What is the project's discounted payback period? Select one: a. 1.81 years O b. None of these Oc. 1.44 years Od. 1.63 years O e. 2.82 yearsAssume you can lease an item you need for a project for GH¢950/day. To purchase the item, thecost is GH¢13,000 plus a daily operational cost of GH¢ 300/day.a. How long will it take for the purchase cost to be the same as the lease cost? Critically discuss the appropriate make or buy decisions to be made in case the item will beused for; i. ii. iii. At most 15 daysMore 15 days but not exceeding 20 daysAt least 20 daysDhofar water is installing new equipment at a cost of 140000 OMR. Expected cash flows from this project over the next three years will be 95000 OMR , 80000 OMR and 65000 OMR. The company's discount rate for such projects is 10 percent. What is the project's discounted payback period? Select one: О а. 1.63 years ОБ. 1.81 уеars О с. 2.82 years O d. None of these О е. 1.44 years