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Question - On July 1, 2014, OG obtained a contract to construct a building. The building was estimated to be built at a total cost of P 15,000,000 and is scheduled for completion on October 2016. The contract contains a penalty clause to the effect the other party was to deduct P 35,000 form the contract price for each week of delay. On the other hand, if the contractor was able finish the building earlier than agreed, it will be rewarded an amount equal to P 50,000 for every month of early completion. Furthermore, cost escalation clause was included in the contract. In 2015, the estimated costs of particular construction material amounting to P 520,000 were bought for P 780,000. The increase in the contract price related to this cost escalation was approved by the client. Completion was delayed for 4 weeks. The records show:
2014
2015
2016
Costs incurred
P1,750,000
P6,440,000
P1,085,000
Estimated cost to complete
7,000,000
1,810,000
-
Progress billings
1,400,000
15,225,000
4,200,000
Required - What is the original contract price in 2014?
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