Reference no: EM132753546

Emma Corporation has consistently used the percentage of completion method of recognizing income. During 2020, Emma Corp. entered into a fixed price contract of P10,000,000. The following information available to the contract:

                                                                  December 30, 2020            December 31, 2021

Percentage of completion----------------------------------20%--------------------------60%

Estimated completion at completion ----------------P7,500,000------------------P8,000,000

Income recognized to date ------------------------------500,000 -------------------- 1,200,000

Problem 1: The contract cost incurred to date on 2020 is:

Option 1: 3,200,000

Option 2: P1,500,000

Option 3: P4,800,000

Option 4: P3,300,000