Problem $2$: Boy Corp. entered into a construction agreement in $2020$ that called for

a contract price of $48$ M $.$ At the beginning of $2021,$ a change order increased the

initial contract price by P$2,400,000.$ At contract inception, Boy assesses its

performance obligation in the contract and concludes that the contracts is a single

performance obligation that be satisfied over time. The company uscs the percentage

of completion method $($cost$-$to$-$cost$)$ for completing the project.

What is the gross profit $($loss$)$ should Boy Corp recognize in $2021?$

a$.(3,600,000)$

c$.(1,200,000)$

b$.-(2,400,000)$

d$.(4,800,000)$

Problem $3$: ABC builders Inc. uses the cost$-$to$-$cost method to measure the outcome

of the performance obligation. At contract inception, ABC assesses its performance

obligation in the contract and concludes that the contracts is a single performance

obligation that be satisfied over time. In $201,$ABC began work on a contract it had

received which provided for a contract price of P$15,000,000.$ The following are the

details of the contract:

Which of the following is incorrect?

a$.$ The realized gross profit for the year amounted to P$2,600,000$

b$.$ The construction in progress amounting to P$2,400,000$ will be debited to record

the contract cost incurred.

c$.$ Receivable account will be debited amounting to $P6,000,000$ to record the

contract billing for the year.

d$.$ The contract revenue for the year will be credited amounting to P$5,000,000$