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Question - On Jan 2, 2020, JGG Builders Corp. of Dumaguete City enters into a contract to construct a building for P20M. During the construction period, many change orders are made to the original contact. All of the changes were accepted by both the customer and the contractor. The following schedule summarizes the change orders in 2020:
Cost incurred in 2020
Estimated Costs to Complete
Contract Price
Basic Contract
8,772,500
7,137,500
20,000,000
Change order # 1
50,000
140,000
Change order # 2
-
Change order # 3
300,000
600,000
Change order # 4
90,000
100,000
Required - Under the percentage-of-completion method, what is the gross profit to be recognized on December 31, 2020 (rounded to the nearest peso)?
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