Name:________________________________Class Schedule____________ Gr.

#__________ Date:_____

1. The Robert Construction Corporation uses the percentage-of-completion method of accounting.

In 2013, Robert began on a contract it had received which provided for a contract price of
P8,000,000. Other details follow:

Cost incurred during the year P1,200,000

Estimated costs to complete as of 12/31/13 4,800,000
Billings during the year 1,440,000
Collections during the year 1,000,000

What should be the gross profit recognized in 2013?

a. P160,000
b. P240,000
c. P400,000
d. P1,600,000

2. West Construction Company recognized gross profit to date of P31,500 on its long term project
what has accumulated costs of P61,250. To finish the project, the company estimates that it has
to incur additional cost of P122,500. Billings made were 40% of the contract price.
What is the balance of the Construction in Progress, net of billings?
a. P18,500 current liability
b. P18,550 current asset
c. P50,050 current asset
d. P50,050 current liability

3. The following data pertains to Bell Cos construction jobs, which commenced during 2013.
Project 1 Project 2

Contract price P420,000 P300,000

Costs incurred during 2013 240,000 280,000
Estimated costs to complete 120,000 40,000
Billed to customers during 2013 150,000 270,000
Received from customers during 2013 90,000 250,000

What amount of gross profit (loss) would Bell report in 2013 under the zero profit method and
the percentage-of-completion method?

a. P(20,000) and P20,000

b. P20,000 and P(20,000)
c. P20,000 and P340,000
d. P40,000 and P420,000

4. State Co. recognizes construction revenue and expenses using the percentage-of-completion
method. During 2012 a single long-term project was begun, which continued through 2013.
Information on the project follows:
 2012 2013

Accounts Receivable from construction contract P100,000 P300,000

Construction expenses 105,000 192,000
Construction in Progress 122,000 364,000
Partial billings on contract 100,000 420,000

Profit recognized from the long-term construction contract in 2013 should be

a. P50,000
b. P108,000
c. P128,000
d. P228,000

5. Builders Construction, Inc. uses the percentage of completion method in recognizing income. In
2012, Builders Construction Inc. was engaged by SM on a fixed-price contract to build a 4-storey
shopping mall.

On January 1, 2013, a fire damaged the accounting records of Builders Construction, Inc. The
president of the company has contracted you to reconstruct the contract information. The
following data were taken from the salvaged files:

12/31/11 12/31/12

Architects estimated cost of completion P7,500,000 P8,000,000

Costs incurred ? P3,300,000
Percentage of completion ? 60%
Income recognized to date P500,000 P1,200,000

Compute for the percentage completed in 2011 on SM Shopping Mall

a. 40%
b. 25%
c. 20%
d. 30%

6. Mega Construction Company was awarded a contract to construct a new sewage for MWSS for a
price of P3,250,000. The original estimate of the cost to complete the project was P3,000,000.
The contract provides for periodic progress billings. A final billing equal to 25% of the contract
price is to be made upon final inspection and acceptance by the MWS.

The construction record for the system was as follows

Cost incurred Estimated cost
Date to date to complete
Dec.31, 2011 P1,075,000 P1,612,500
Dec. 31, 2012 2,625,000 750,000
 Aug. 15, 2013 3,425,000 -

The construction was inspected on August 15, 2011, January 15, 2011 and October 1, 2012 and
the progress billings equal to 25% of the contract price wee made on each of these dates (thus,
75%). The system was completed, and final inspection and acceptance took place on August 21,
2013.
How much is the construction in progress, net of billings in the 2012?
a. P875,000, current liability
b. P2,463,600, current asset
c. P287,500, current liability
d. P62,500, current assets

For numbers 7 and 8

North Construction Company uses the percentage of completion method of recognizing gross
profit on long term construction contracts. The company started work on two contracts during
2012. Data relating to the two contracts are given below:

Contract Price Actual Cost (12/31/12) Estimated Cost to Complete

Contract 1 P1,800,000 P450,000 P450,000
Contract 2 P1,350,000 262,500 487,500

In 2013, contract 3 was started for a contract price of P2,700,000. As of December 31, 2013, the
following data are available:

Actual Cost (1/1/12-12/31/13) Estimated Cost to complete

Contract 1 P840,000 P210,000
Contract 2 540,000 360,000
Contract 3 540,000 960,000

7. How much income is to be recognized in 2013?

a. P1,302,000
b. 432,000
c. 642,000
d. 270,000
8. Using the same data, what is the balance of the Construction in Progress account as of December
31, 2013?
a. P3,222,000
b. 3,942,000
c. 1,920,000
d. 2,562,000

For numbers 9 to 11
 In 2011, South Builders agreed to construct a commercial building at a price of P1,000,000. South
Builders uses the percentage of completion method of recognizing revenue on long term
construction projects. The data relating to the projects from 2011 to 2013 are as follows

2011 2012 2013

Cost incurred each year P280,000 P320,000 P185,000
Estimated cost to complete 520,000 200,000 -
Billings to date 150,000 400,000 1,000,000
Collections of billing to date 120,000 320,000 940,000
9. What is the amount of gross profit to be recognized in 2012?
a. P80,000
b. 78,500
c. 85,000
d. 90,000
10. What is the balance of Construction in Progress, net of Contract Billings of South Builders on
December 31, 2012?
a. P350,000
b. 300,000
c. 550,000
d. 380,000
11. Using data in NO. 27, assuming the company uses the zero profit of recognizing revenue from the
project, what is the balance of the CIP account, net of contract billings as of December 31, 2012?
a. P200,000
b. P250,000
c. P350,000
d. P300,000

For numbers 12 to 15

Sin Construction Co. has used the cost-to-cost percentage of completion method of recognizing revenue,
Marc Sin assumed the presidency of the company after the death of his father, Vincent. In reviewing the
records, Marc finds the following information regarding a recently completed building project for which
the total contract was P1,000,000

2011 2012 2013

Gross profit (loss) P20,000 P70,000 P(10,000)

Cost incurred each year 180,000 ? 410,000

Marc wants to know how effectively the company operated during the three (3) years on this project and,
since the information is not complete, has asked for answers to the following questions:

12. How much cost was incurred in 2012?

a. P660,000
b. 600,000
c. 300,000
d. 330,000
13. What percentage of the project was completed by the end of 2012?
a. 65%
b. 55%
c. 60%
d. 79%
14. What was the total estimated gross profit on the project by the end of 2012?
a. P300,000
b. 180,000
c. 150,000
d. 350,000
15. What was the estimated cost of complete the project at the end of 2012?
a. P340,000
b. 300,000
c. 650,000
d. 680,000