What is the balance of the construction in progress

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Reference no: EM132788188

Question - On January 1, 2020, Mechathon Inc. accepted a long-term construction contract to build a condominium with a total contract price of P27,000,000. For the two years ended December 31, 2020 and 2021, the following data were provided by Mechathon Inc.:

12/31/2020

General administration cost which is not reimbursable under the contract for the year P1,800,000

Site labor costs including site supervision for the year 3,150,000

Selling costs for the year 3,600,000

Cost of direct materials used in construction for the year 2,250,000

Estimated cost to complete the condominium at year end 3,600,000

12/31/2021

General administration cost which is not reimbursable under the contract for the year P2,700,000

Site labor costs including site supervision for the year 4,500,000

Selling costs for the year 900,000

Cost of direct materials used in construction for the year 3,060,000

Estimated cost to complete the condominium at year end 3,240,000

Mechathon Inc. billed its client 30% during 2020 and 40% during 2021. The outcome of the construction contract can be estimated reliably.

Required - What is the balance of the Construction in Progress in excess of Progress Billings / (Progress Billings in excess of Construction in Progress) to be presented in the Mechathron's December 31, 2021 Statement of Financial Position?

Reference no: EM132788188

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