How much is the gross profit earned from the contract

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Problem - On January 1, 20x1, ABC Co. enters into a contract with a customer for the construction of a building. The contract price is P1,000,000. The following are the transactions during 20x1: At contract inception, the customer makes an advance payment of P100,000 as facilitation fee. ABC Co. incurs total contract costs of P300,000 during the period. The estimated costs to complete as of year-end amounts to P500,000. ABC Co. collects the billing, net of 10% retention by the customer to be used to rectify any unsatisfactory work determined at the completion of the contract. How much is the gross profit earned from the contract in 20x1?

a. 75,000

b. 82,000

c. 375,000

d. 482,000

Reference no: EM132682494

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