Construction Contracts Flashcards
Cons Contract
Percentage of completion is the same as the revenue recognition_____
Over time
Cons Contract
The Cost Recovery (Zero Profit) Method is the same as revenue recognition___€
At point in time
Two Methods for Construction Contracts:
- Percentage of Completion / Cost to Cost Method aka Westlife Method:
Input & Output - Cost Recovery Method / Zero Profit Method
Cons Contract
Percentage of Completion / Cost to Cost
POC formula?
Cost Incurred to Date / Total Estimated Cost (most recent)
Cons Contract
Please, pakilatag yung Pro-porma sa Percentage of Completion / Westlife Method
Refer your answer to AddVac pg. 321 or Master M
Cons Contract
What method should be used?
If the completion estimates are reliable or not reliable?
If reliable - POC/Cost to Cost
Not reliable - ZP / Cost Recovery
Cons Contract
Zero Profit / Cost Recovery Method. Kelan nag rerecognize ng GP?
Last year
Cons Contract
Account Classification and Explain
CIP
Progress Billings
CIP - Asset / Inventory
Progress Billings - CL
Cons Contract
Basta sa both method, saan kinoclose yung IS accounts? Like Raw mats, Utilities Exp, Labor, etc?
Sa CIP.
Cons Contract
CIP for the year is equal to?
Relationship of PB and CIP?
CIP = Revenue. Or cost incurred for the year plus RGP
If mataas ang PB than CIP, then liabs. Otherwise, asset.
Cons Contracts
Entry if completed na ang Constructed Building and turn over na sa customer?
- Dr. Builiding
Cr. CIP - Dr. P/B
Cr. Building
Cons Contract
Inlduded to Construction Cost?
- Reimbursable development, general and admin costs
- Selling and Marketing Costs
- Yes
- No
Cons Contract
POC.
Pano pag loss?
That total expected loss Should be reported/recognize in that year. Plus profit previously recognized
