In 20x1, Devin Co. enters into a contract to construct a building for a customer. Devin Co. identifies its peromance obligation to be satisfied over time. Devin CO. measures its progress on the contract based on ccosts incurred. The contract price is P10M. Devin has an unconditional right to all billings made in accordance with the billing schedule stated in the contract. Information on the construction is provided below:
20x1 20x2 20x3
a. Contract costs incurred to date 3,150,000 5,680,000 7,120,000
b. Biliings per year 4,000,000 5,000,000 1,000,000
c. Collections on billings per year 3,600,000 4,500,000 1,900,000
a. Compute for the gross profits, revenues and costs of construction in 20x1, 20x2, 20x3, respectively.
b. Provide the journal entries under (i) traditional accounting and (ii) PFRS 15.
c. Determine the amounts presented in the financial statements.