COMPUTATION OF:

1 PERCENTAGE OF COMPLETION
COST INCURRED TO DATE / TOTAL ESTIMATED COST
2 REALIZED GROSS PROFIT
COMULATATIVE GROSS PROFIT X % OF COMPLETION
SECOND = CUMULATIVE GROSS PROFIT - PREVIOUS PROFIT
3 TOTAL ESTIMATED COST
COST INCURRED TO DATE + ESTIMATED COST TO COMPLETE
4 GROSS PROFIT
CONTRACT PRICE - TOTAL ESTIMATED COST

% OF COMPLETION METHOD COST RECOVERY METHOD

1 REVENUE 1 REVENUE
COST COST
REALIZED PROFIT THERE IS PROFIT NO PROFIT

2 CONSTRUCTION IN PROGRESS 2 CONSTRUCTION IN PROGRESS

CUMULATIVE COST INCURRED CUMULATIVE COST INCURRED
CUMULATIVE REALIZED GROSS PROFIT CUMULATIVE REALIZED GROSS PROFIT
 % OF COMPLETION METHOD
QUESTION#1 REALIZED GROSS PROFIT

GROSS PROFIT X % OF COMPLETION

440,000 X 45% 198,000

QUESTION#2 NET INCOME

REALIZED GROSS PROFIT 198,000

LESS: EXPENSES 4,000
NET INCOME 194,000

QUESTION#3 REVENUE

RGP 198,000
COST 1,250,000
REVENUE 1,448,000

QUESTION #4 EXCESS OF CONSTRUCTION IN PROGRESS OVER PROGRESS BILLINGS

CONSTRUCTION IN PROGRESS ( CIP)

REALIZED GROSS PROFIT TO DATE 198,000
COST INCURRED TO DATE 1,250,000
TOTAL CIP 1,448,000
PROGRESS BILLINGS 1,150,000
EXCESS OF CIP OVER PB 298,000

QUESTION#5 JOURNAL ENTRIES

COST INCURRED 1,250,000

DIRECT MATERIALS USED 60% 750,000 RAW MATERIALS PURCHASES
DIRECT LABOR 25% 312,500
FACTORY OVERHEAD 15% 187,500
TOTAL COST INCURRED 1,250,000

A. CONSTRUCTION MATERIALS 937,500

CASH / AP 937,500

B. PAYROLL 312,500
CASH / ACCRUED PAYROLL 312,500

C. FACTORY OVERHEAD 187,500

CASH / ACCRUED PAYROLL 187,500

D. CONSTRUCTION IN PROGRESS 750,000

 CONSTRUCTION MATERIALS 750,000

E. CONSTRUCITON IN PROGRESS 312,500

PAYROLL 312,500

F. CONSTRUCTION IN PROGRESS 187,500

FACTORY OVERHEAD 187,500

QUESTION#6 REALIZED GROSS PROFIT/LOSS FOR THE YEAR 2016

GROSS LOSS X % OF COMPLETION

2,016 (210,000) X 85% (210,000)
LESS: 2015 198,000
RGL 2016 (408,000)

QUESTION#7 NET INCOME/LOSS

REALIZED GROSS LOSS (408,000)

LESS: EXPENSES 4,000
NET LOSS (412,000)

QUESTION#8 CONTRACT REVENUE

RGL (408,000)
COST 1,650,000
REVENUE 1,242,000

QUESTION #9 EXCESS OF CONSTRUCTION IN PROGRESS OVER PROGRESS BILLINGS FOR 2016

CONSTRUCTION IN PROGRESS ( CIP)

REALIZED GROSS PROFIT TO DATE (210,000)
COST INCURRED TO DATE 2,900,000
TOTAL CIP 2,690,000
PROGRESS BILLINGS 2,960,000
EXCESS OF PB OVER CIP (270,000)

QUESTION#10 JOURNAL ENTRIES

COST INCURRED 1,650,000

DIRECT MATERIALS USED 60% 990,000
DIRECT LABOR 25% 412,500
FACTORY OVERHEAD 15% 247,500
TOTAL COST INCURRED 1,650,000
 A. CONSTRUCTION MATERIALS 1,050,000
CASH / AP 1,050,000

B. PAYROLL 412,500
CASH / ACCRUED PAYROLL 412,500

C. FACTORY OVERHEAD 247,500

CASH / ACCRUED PAYROLL 247,500

D. CONSTRUCTION IN PROGRESS 990,000

CONSTRUCTION MATERIALS 990,000

E. CONSTRUCITON IN PROGRESS 412,500

PAYROLL 412,500

F. CONSTRUCTION IN PROGRESS 247,500

FACTORY OVERHEAD 247,500

QUESTION#11 REALIZED GROSS PROFIT/LOSS FOR THE YEAR 2017

GROSS LOSS X % OF COMPLETION

2017 (210,000) X 85% (210,000)
LESS: 2016 198,000
RGL 2017 (408,000)

QUESTION#12 NET INCOME/LOSS FOR 2017

REALIZED GROSS PROFIT 400,000

LESS: EXPENSES 4,000
NET INCOME 396,000

QUESTION#13 CONTRACT REVENUE

RGP 400,000
COST 120,000
REVENUE 520,000

QUESTION#14 EXCESS OF CONSTRUCTION IN PROGRESS OVER PROGRESS BILLINGS FOR 2016

CONSTRUCTION IN PROGRESS ( CIP)

REALIZED GROSS PROFIT TO DATE 190,000
COST INCURRED TO DATE 3,020,000
TOTAL CIP 3,210,000
PROGRESS BILLINGS 3,210,000
 EXCESS OF PB OVER CIP 0

QUESTION#15 JOURNAL ENTRIES

COST INCURRED 120,000

DIRECT MATERIALS USED 60% 72,000
DIRECT LABOR 25% 30,000
FACTORY OVERHEAD 15% 18,000
TOTAL COST INCURRED 120,000

A. CONSTRUCTION MATERIALS 72,000

CASH / AP 72,000

B. PAYROLL 30,000
CASH / ACCRUED PAYROLL 30,000

C. FACTORY OVERHEAD 18,000

CASH / ACCRUED PAYROLL 18,000

D. CONSTRUCTION IN PROGRESS 72,000

CONSTRUCTION MATERIALS 72,000

E. CONSTRUCITON IN PROGRESS 30,000

PAYROLL 30,000

F. CONSTRUCTION IN PROGRESS 18,000

FACTORY OVERHEAD 18,000
 COST RECOVERY METHOD

0 = BECAUSE NO PROFIT

NET LOSS

REALIZED GROSS PROFIT 0

LESS: EXPENSES 4,000
NET LOSS (4,000)

RGP 0
COST 1,250,000
REVENUE 1,250,000

CONSTRUCTION IN PROGRESS ( CIP)

REALIZED GROSS PROFIT TO DATE 0
COST INCURRED TO DATE 1,250,000
TOTAL CIP 1,250,000
PROGRESS BILLINGS 1,150,000
EXCESS OF CIP OVER PB 100,000

W MATERIALS PURCHASES 750,000/80% 937,500

 LOSS SHOULD BE RECOGNIZED (408,000)

REALIZED GROSS PROFIT (408,000)

LESS: EXPENSES 4,000
NET LOSS (412,000)

RGL (408,000)
COST 1,650,000
REVENUE 1,242,000

CONSTRUCTION IN PROGRESS ( CIP)

REALIZED GROSS PROFIT TO DATE (210,000)
COST INCURRED TO DATE 2,900,000
TOTAL CIP 2,690,000
PROGRESS BILLINGS 2,960,000
EXCESS OF PB OVER CIP (270,000)

2015 2016
RM BEG 0
RM PURCHSES 937,500 1,050,000
RMAFU 937,500 1,237,500
LESS : END 187,500 247,500
DIRECT MATERIALS USED 750,000 990,000
LOSS SHOULD BE RECOGNIZED (408,000)

PERCENTAGE OF COMPLETION
REVENUE 310,000 310,000 2015 198,000
COST 120,000 120,000 2016 (408,000)
LESS:EXPENSES 4,000 190,000 2017 400,000
NET INCOME 186,000 TOTAL PROFIT 190,000

3,210,000 CP = TOTAL REVENUE

RGP 310,000 1,250,000 2015
1,650,000 2016
REVENUE 310,000 310,000 2017

CONSTRUCTION IN PROGRESS ( CIP)

REALIZED GROSS PROFIT TO DATE 190,000
COST INCURRED TO DATE 3,020,000
TOTAL CIP 3,210,000
PROGRESS BILLINGS 3,210,000
 EXCESS OF PB OVER CIP 0

2016 2017
RM BEG 0 187,500 18,000
RM PURCHSES 937,500 (97,500) 72,000
RMAFU 937,500 90,000 90,000
LESS : END 187,500 18,000
DIRECT MATERIALS USED 750,000 72,000
2,016
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F COMPLETION