DPWH had the following transactions related to a construction project of school building worth P28,000,000 during the year 2021: January 25. Payment of mobilization fee equivalent to 15% of the contract price. March 10. Received 1st progress billing from the contractor equivalent to 40% completion of contract price. March 25. Paid the amount due to the contractor for the 1st progress billing. Deductions are: Recoupment of advances based on % of completion (deducted upon payment) Retention, 5% of the billings Withholding taxes (EWT & Final VAT) The entry to recognize the payment of mobilization fee includes a: a. Debit to Advances to Contractors, P4,200,000 b. Debit to Advances to Officers and Employees, P4,200,000 c. Debit to Accounts Receivable, P4,200,000 d. Debit to Advances to SDO, P4,200,000
DPWH had the following transactions related to a construction project of school building worth P28,000,000 during the year 2021: January 25. Payment of mobilization fee equivalent to 15% of the contract price. March 10. Received 1st progress billing from the contractor equivalent to 40% completion of contract price. March 25. Paid the amount due to the contractor for the 1st progress billing. Deductions are: Recoupment of advances based on % of completion (deducted upon payment) Retention, 5% of the billings Withholding taxes (EWT & Final VAT) The entry to recognize the payment of mobilization fee includes a: a. Debit to Advances to Contractors, P4,200,000 b. Debit to Advances to Officers and Employees, P4,200,000 c. Debit to Accounts Receivable, P4,200,000 d. Debit to Advances to SDO, P4,200,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
DPWH had the following transactions related to a construction project of school building worth P28,000,000 during the year 2021:
January 25. Payment of mobilization fee equivalent to 15% of the contract price.
March 10. Received 1st progress billing from the contractor equivalent to 40% completion of contract price.
March 25. Paid the amount due to the contractor for the 1st progress billing. Deductions are:
- Recoupment of advances based on % of completion (deducted upon payment)
- Retention, 5% of the billings
- Withholding taxes (EWT & Final VAT)
The entry to recognize the payment of mobilization fee includes a:
a. Debit to Advances to Contractors, P4,200,000
b. Debit to Advances to Officers and Employees, P4,200,000
c. Debit to Accounts Receivable , P4,200,000
d. Debit to Advances to SDO, P4,200,000
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