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Question - On July 1, 2017, Dinar obtained a contract to construct a building. The building was estimated to be built at a total cost of P15,000,000 and is scheduled for completion on October 2019. The contract contains a penalty clause to the effect that the other party was to deduct P35,000 from the contract price for each week of delay. On the other hand, if the contractor was able to finish the building earlier than agreed, it will be rewarded an amount equal to P50,000 for every month of early completion. Furthermore, cost escalation clause was included in the contract. In 2018, the estimated costs of particular construction material amounting to P520,000 were bought for P780,000. The increase in the contract price related to this cost escalation was approved by the client. Completion was delayed for 4 weeks. The records show:
2017
2018
2019
Costs incurred
P1,750,000
6,440,000
1,085,000
Estimated cost to complete
7,000,000
1,810,000
-
Progress billings
1,400,000
15,225,000
4,200,000
Required -
1. What is the Original Contract Price 2017?
2. What is the Original Contract Price 2018?
3. What is the CIP net as of 2018?
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