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Problem - Dragon Construction was recently awarded a P14,000,000 contract to construct a shopping mall for Ayala Malls. Dragon Construction estimates it will take 42 months to complete the contract. During 2018, the contract price was increased by P100,000 due to expected increase in construction costs. No adjustment to revenue was agreed by the parties after that. The company uses the cost-to-cost method to estimate profits. The following information details the actual and estimated costs for the year 2017 - 2020:
Year
Actual Cost-Current year
Estimated Cost to Complete
2017
P6,450,500
P6,849,500
2018
3,413,500
3,836,000
2019
2,883,600
1,416,400
2020
1,400,000
0
Required - Using the percentage of completion method, how much is the construction revenue recognized in 2017?
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