What is the total amount of expenses to be reported

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Question - Topic: LONG-TERM CONSTRUCTION CONTRACTS - BUILDERS Construction is constructing an office building under contract. The contract calls for progress billings and payments of P1,240,000 each quarter. The total contract price is P14,880,000 and the company estimates total costs of P14,200,000. The company estimates that the building will take three years to complete and construction commences on 2022.

At December 31, 2023 BUILDERS Construction estimates that it is 75% complete with their current construction project; however, the estimate of total costs to be incurred has risen to P14,400,000 due to unanticipated price increases.

How is the difference, debit/(credit) between the construction in progress and the billings on construction in progress reported? (Solutions must be in good accounting form)

A. (3,380,000)

B. 1,240,000

C. 880,000

D. (1,240,000)

If the building was 30% completed by the end of 2022, what is the total amount of expenses to be reported for 2023?

A. 10,800,000

B. 6,540,000

C. 6,390,000

D. 6,300,000

Reference no: EM133030152

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