Cemex Co. began work on a P280 million contract in 2019 to construct an office building. During 2019, Cemex uses the percentage of completion method. At the end of the year, the balance in certain accounts were: Construction in Progress, P98 million; Accounts Receivable, P9.6 million; and Progress Billings, P48 million. The estimated future cost of completion is P127.4 million. How much is the construction income for the year 2019?    A. P98,000,000 B. P48,000,000 C. P29,400,000 D. -0-

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Contract Costing

Contract costing is about tracing particular costs related to a particular contract entered into with the customer. It is one of the forms of job order costing. It is useful in long-term contracts at the most. It is seen that substantial time is required for the completion of the contract which takes different accounting periods. Thus, it is very much helpful for recognizing the costs associated with it and accounting in their specific accounting periods.