2. BBB Company entered into a contract with Hometown Hospital on July 1, 2018 to...
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2. BBB Company entered into a contract with Hometown Hospital on July 1, 2018 to construct a four-storey hospital. At that time, BBB estimated that it would take 3-4 years to complete the project. The total contract is P25,000,000. In 2018, the outcome of the project cannot be estimated reliably but in 2019, BBB was already certain the project is estimated to cost P20,000,000. The building was substantially completed in 2020. Contract costs incurred, estimated costs to complete and progress billings were as follows: Contract costs incurred Estimated costs to complete Billings to client 2018 3,250,000 13,000,000 2,500,000 2019 5,750,000 9,000,000 6,500,000 2020 8,550,000 1,950,000 9,500,000 Determine the following: a. Percentage of completion each year b. Amount of contract revenue, contract costs and profit to appear in the income statement of each year C. Entries required to record the transactions each year
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