In 20x1, ABC Co. was contracted to build a railroad. The contract price is equal to the construction costs incurred plus 20% thereof. However, if the project is completed within 4 years, ABC will...

How much profit is recognized on the contract in 20x3?

Extracted text: In 20x1, ABC Co. was contracted to build a railroad. The contract price is equal to the construction costs incurred plus 20% thereof. However, if the project is completed within 4 years, ABC will receive an additional payment of P200,000. Information on the project is shown below: 20x1 20x2 20x3 Costs incurred to date 2,450,000 4,575,000 6,215,000 Estimated costs to complete 3,600,000 1,525,000 125,000 In 20x1 and 20x2, it was not highly probable that the project will be completed on time. However, in 20x3, ABC assessed that the project will be completed earlier than originally expected and thus it is now highly probable that the incentive payment will be received.