Basic Concepts of Progress Billing

Problem 1: Basic Progress Billing Computation

A contractor was awarded a ₱5,000,000 project. After completing 30% of the work,
how much should the contractor bill the client for this progress billing cycle?
Solution:
Amount to be billed = (30% of ₱5,000,000)
= 0.30 × ₱5,000,000
= ₱1,500,000

Problem 2: Retention in Progress Billing

A contractor submits a progress billing of ₱2,000,000. If the contract states a 10%
retention, how much will the contractor receive after deduction?
Solution:
Retention amount = 10% of ₱2,000,000
= 0.10 × ₱2,000,000
= ₱200,000
Total amount to be received = ₱2,000,000 - ₱200,000
= ₱1,800,000

Problem 3: VAT Computation in Progress Billing

A contractor's progress billing is ₱3,000,000. The VAT rate is 12%. How much is
the VAT amount, and what is the total billing amount including VAT?
Solution:
VAT Amount = 12% of ₱3,000,000
= 0.12 × ₱3,000,000
= ₱360,000
Total billing amount = ₱3,000,000 + ₱360,000
= ₱3,360,000

Advanced Progress Billing Scenarios

Problem 4: Net Payable after Retention and VAT
A contractor’s progress billing is ₱4,500,000. The project has a 10% retention and
is subject to 12% VAT. How much is the net amount payable?
Solution:
Retention = 10% of ₱4,500,000 = ₱450,000
VAT = 12% of ₱4,500,000 = ₱540,000
Total Billing (with VAT) = ₱4,500,000 + ₱540,000 = ₱5,040,000
Net Payable = ₱5,040,000 - ₱450,000
= ₱4,590,000

Problem 5: Deduction for Withholding Tax

A contractor's progress billing is ₱1,200,000, and withholding tax (5%) is applied.
How much will the contractor receive after this deduction?
Solution:
Withholding Tax = 5% of ₱1,200,000
= 0.05 × ₱1,200,000
= ₱60,000
Net Receivable = ₱1,200,000 - ₱60,000
= ₱1,140,000

Problem 6: Billing for Mobilization Advance

A contractor receives a 15% mobilization advance for a ₱10,000,000 project.
How much is the mobilization advance payment?
Solution:
Mobilization Advance = 15% of ₱10,000,000
= 0.15 × ₱10,000,000
= ₱1,500,000

Retained Amount Computation

Problem 7: Cumulative Retention Calculation
A project worth ₱8,000,000 has been billed in three progress billings:
 First: ₱2,000,000
 Second: ₱3,000,000
 Third: ₱2,000,000
If retention is 10%, what is the total retained amount after three billings?
Solution:
Retention per billing:
1st Billing = ₱2,000,000 × 10% = ₱200,000
2nd Billing = ₱3,000,000 × 10% = ₱300,000
3rd Billing = ₱2,000,000 × 10% = ₱200,000
Total Retained Amount = ₱200,000 + ₱300,000 + ₱200,000
= ₱700,000
Problem 8: Release of Retention
The total retained amount in a project is ₱1,000,000. If 50% of the retention is
released after project completion, how much will the contractor receive?
Solution:
Amount to be released = 50% of ₱1,000,000
= 0.50 × ₱1,000,000
= ₱500,000

Escalation and Variation Orders

Problem 9: Variation Order Impact on Progress Billing
A contractor was awarded a ₱6,000,000 contract. Later, an approved variation
order increased the contract by ₱500,000. If 40% of the revised contract is
completed, how much should the contractor bill?
Solution:
Revised Contract Price = ₱6,000,000 + ₱500,000
= ₱6,500,000
Amount to be billed = 40% of ₱6,500,000
= 0.40 × ₱6,500,000
= ₱2,600,000

Problem 10: Price Escalation Clause Application

A project contract was originally ₱4,000,000. Due to material price escalation, an
additional 5% increase was approved. What is the new contract price?
Solution:
Increase = 5% of ₱4,000,000
= 0.05 × ₱4,000,000
= ₱200,000
New Contract Price = ₱4,000,000 + ₱200,000
= ₱4,200,000

I'll stop at 10 for now. Do you want me to continue with more scenarios, like
liquidated damages, cost overruns, or subcontractor payments? 🚧
4o
You said:
continue please
ChatGPT said:
Here are 10 more sample problems with solutions related to progress billing in
construction engineering in the Philippines setting:

Liquidated Damages and Delays

Problem 11: Liquidated Damages Deduction
A contractor delayed the project completion by 10 days. The contract states a
liquidated damages (LD) rate of ₱5,000 per day. How much will be deducted
from the final billing?
Solution:
LD Deduction = ₱5,000 × 10 days
= ₱50,000

Problem 12: Net Billing After LD Deduction

A contractor’s final billing is ₱1,800,000, but liquidated damages of ₱100,000 are
applied due to delays. How much is the net receivable amount?
Solution:
Net Receivable = ₱1,800,000 - ₱100,000
= ₱1,700,000

Subcontractor Payments
Problem 13: Subcontractor Progress Billing Deduction
A general contractor bills ₱5,000,000 for progress but needs to pay ₱1,200,000 to
subcontractors. How much is the net amount the general contractor receives?
Solution:
Net Receivable = ₱5,000,000 - ₱1,200,000
= ₱3,800,000

Problem 14: Subcontractor Retention Deduction

A subcontractor’s billing is ₱900,000, and a 10% retention is applied. How much
will the subcontractor receive?
Solution:
Retention = 10% of ₱900,000
= ₱90,000
Net Payment = ₱900,000 - ₱90,000
= ₱810,000

Cost Overruns and Adjustments

Problem 15: Cost Overrun in Progress Billing
A project budget is ₱10,000,000, but actual progress billing reaches ₱11,500,000
due to cost overruns. What is the percentage of the overrun?
Solution:
Cost Overrun = (₱11,500,000 - ₱10,000,000) / ₱10,000,000 × 100%
= ₱1,500,000 / ₱10,000,000 × 100%
= 15% overrun

Problem 16: Adjusted Progress Billing Due to Material Price Increase

A contractor billed ₱2,500,000, but material prices increased, leading to an
approved adjustment of ₱250,000. What is the new billing amount?
Solution:
New Billing Amount = ₱2,500,000 + ₱250,000
= ₱2,750,000

Final Retention Release and Completion Billing

Problem 17: Final Retention Release After Defects Liability Period
A ₱500,000 retention was withheld. After the defects liability period, the owner
releases 80% of the retention. How much is released?
Solution:
Released Retention = 80% of ₱500,000
= ₱400,000

Problem 18: Final Billing After Retention Release

A contractor has a final progress billing of ₱3,200,000 with ₱500,000 in retention.
If the retention is fully released, what is the total final amount received?
Solution:
Total Received = ₱3,200,000 + ₱500,000
= ₱3,700,000

Multiple Progress Billings

Problem 19: Total Amount Billed Across Multiple Progress Billings
A contractor submitted the following progress billings:
 1st Billing: ₱2,000,000
 2nd Billing: ₱2,500,000
 3rd Billing: ₱3,000,000
What is the total amount billed so far?
Solution:
Total Billing = ₱2,000,000 + ₱2,500,000 + ₱3,000,000
= ₱7,500,000

Problem 20: Percentage of Work Completed Based on Billings

A contractor has a ₱12,000,000 contract. So far, they have billed ₱7,500,000.
What percentage of work is completed?
Solution:
Percentage Completed = (₱7,500,000 / ₱12,000,000) × 100%
= 62.5%

These problems cover a range of real-world construction billing scenarios,

including progress payments, retention, VAT, withholding tax, liquidated
damages, and subcontractor payments. Let me know if you need more details
or different scenarios! 🚧💰
4o
You said:
can I have 20 different scenario with solution again
ChatGPT said:
Here are 20 more different progress billing scenarios with solutions, tailored to
construction engineering in the Philippines. 🚧💰

1. First Progress Billing Based on Work Completion

Problem:
A contractor is awarded a ₱20,000,000 project. After the first month, 15% of the
work is completed. How much should be billed in the first progress billing?
Solution:
Billing Amount = 15% of ₱20,000,000
= 0.15 × ₱20,000,000
= ₱3,000,000

2. Deduction for Advances in Progress Billing

Problem:
A contractor's progress billing is ₱5,000,000, but they previously received a
mobilization advance of ₱1,000,000 to be deducted from progress payments.
How much will be received?
Solution:
Net Billing = ₱5,000,000 - ₱1,000,000
= ₱4,000,000

3. Computation of Retention for Multiple Progress Billings

Problem:
A contractor submits the following billings with 10% retention:
 1st: ₱3,500,000
 2nd: ₱2,700,000
 3rd: ₱4,200,000
What is the total retained amount?
Solution:
Retention per billing:
 1st: ₱3,500,000 × 10% = ₱350,000
 2nd: ₱2,700,000 × 10% = ₱270,000
 3rd: ₱4,200,000 × 10% = ₱420,000
Total Retained Amount = ₱350,000 + ₱270,000 + ₱420,000
= ₱1,040,000

4. Net Progress Billing After VAT and Retention

Problem:
A contractor's progress billing is ₱6,000,000, subject to 12% VAT and 10%
retention. What is the net amount received?
Solution:
VAT = 12% of ₱6,000,000 = ₱720,000
Gross Billing = ₱6,000,000 + ₱720,000 = ₱6,720,000
Retention = 10% of ₱6,000,000 = ₱600,000
Net Amount = ₱6,720,000 - ₱600,000
= ₱6,120,000

5. Withholding Tax Deduction in Progress Billing

Problem:
A contractor's billing is ₱2,800,000. A 5% withholding tax is applied. How much
will be received?
Solution:
Withholding Tax = 5% of ₱2,800,000 = ₱140,000
Net Receivable = ₱2,800,000 - ₱140,000
= ₱2,660,000

6. Mobilization Advance Deduction Over Multiple Billings

Problem:
A contractor received a ₱2,000,000 mobilization advance. This will be deducted at
20% per progress billing. If the first progress billing is ₱5,000,000, how much will
be deducted?
Solution:
Deduction = 20% of ₱2,000,000
= 0.20 × ₱2,000,000
= ₱400,000
Net Billing = ₱5,000,000 - ₱400,000
= ₱4,600,000

7. Computation of Final Payment After Retention Release

Problem:
A project has a total retention of ₱1,500,000. If 100% is released upon project
completion, how much does the contractor receive?
Solution:
Final Payment = ₱1,500,000

8. Variation Order Impact on Progress Billing

Problem:
A contractor is executing a ₱15,000,000 project. A ₱2,500,000 variation order is
approved. If 50% of the new total is completed, how much should be billed?
Solution:
New Contract Price = ₱15,000,000 + ₱2,500,000 = ₱17,500,000
Amount to be Billed = 50% of ₱17,500,000
= ₱8,750,000

9. Retention Release in Two Phases

Problem:
A total retention of ₱800,000 is to be released in two phases: 50% upon
completion, 50% after the defects liability period. How much is released in
each phase?
Solution:
1st Release = 50% of ₱800,000 = ₱400,000
2nd Release = 50% of ₱800,000 = ₱400,000

10. Effect of Delay Penalty on Final Billing

Problem:
A contractor's final billing is ₱6,500,000, but a delay penalty of ₱200,000 is
applied. What is the net amount received?
Solution:
Net Amount = ₱6,500,000 - ₱200,000
= ₱6,300,000

11-20. Additional Real-World Scenarios

Final
Scenario Computation
Answer

11. Progress Billing Based on Partial ₱4,000,00

40% of ₱10,000,000
Completion 0

12. Additional Tax Deduction ₱5,310,00

(₱5,000,000 - 5%) + 12%
(Withholding Tax + VAT) 0

₱6,000,00
13. Labor Cost Deduction from Billing ₱8,000,000 - ₱2,000,000
0

14. Escalation Adjustment Due to ₱12,600,0

₱12,000,000 × 1.05
Inflation (5%) 00

15. Subcontractor Payment ₱5,000,00

₱6,500,000 - ₱1,500,000
Deduction 0

₱6,500,00
16. Overpayment Adjustment ₱7,000,000 - ₱500,000
0
 Final
Scenario Computation
Answer

₱10,080,0
17. Final VAT Inclusive Billing ₱9,000,000 × 1.12
00

₱5,500,000 - (10% retention ₱4,675,00

18. Net Payment After All Deductions
+ 5% tax) 0

₱3,500,00
19. Equipment Rental Deduction ₱4,200,000 - ₱700,000
0

₱16,800,0
20. Full Project Billing Calculation ₱15,000,000 + 12% VAT
00

These problems cover real-world billing challenges in construction projects in

the Philippines,

Here are 20 sample problems related to Progress Billing in Construction

Engineering, covering different aspects like percentage completion, retention,
variations, and contract terms.
Basic Computation Problems
1. A contractor is awarded a ₱10,000,000 project and has completed 30% of the
work. How much is the progress billing before deductions?
2. A contract states that 10% retention will be applied to every progress billing.
If the contractor submits a ₱2,000,000 progress billing, how much will be
retained?
3. A project has a total contract price of ₱15,000,000. If 40% is completed, and
5% retention is applied, how much will the contractor receive in this billing
cycle?
4. A contractor submits a progress billing for ₱5,000,000, but the owner
withholds 8% as retention. How much will the contractor actually receive?
5. If a project is worth ₱50,000,000 and 60% is completed, what is the amount
due before applying any deductions?
Retainage and Deduction Problems
6. A contractor submits a progress billing of ₱3,500,000. The contract states a
10% retention and a 12% VAT deduction. How much is the final net payment?
7. A project has a 5% retention policy. If the contractor has already submitted
billings totaling ₱20,000,000, how much is currently retained?
 8. If a contract requires 10% withholding tax and 8% retention, how much will a
contractor receive from a ₱4,000,000 progress billing?
9. The contract states that retention will be released once the project reaches
95% completion. If ₱2,000,000 was retained over previous billings, how much
will be released?
10.A contractor is billed ₱1,200,000 for a subcontractor’s work. If the main
contractor applies a 5% retention, how much will the subcontractor receive?
Variation Orders & Adjustments
11.A construction project originally cost ₱25,000,000, but a variation order
increases the contract by 10%. How much is the new contract price?
12.A progress billing includes a variation order worth ₱500,000. If the total
progress billing before the variation was ₱3,000,000, what is the new total
billing amount?
13.A project has an initial contract price of ₱40,000,000. Due to changes in
scope, additional work worth ₱4,500,000 was added. If the project is now
50% complete, how much should be billed?
14.A variation order deducts ₱1,000,000 from the contract price due to scope
reduction. If the original contract was ₱20,000,000 and 75% is complete,
what is the revised billing amount?
15.A contractor claims additional costs of ₱750,000 due to unforeseen site
conditions. If the current progress billing is ₱5,000,000, what is the total
amount after adding the additional cost?
Cash Flow and Payment Schedule Problems
16.A project has a payment schedule where 25% of the total contract price is
paid at 50% completion. If the contract is worth ₱30,000,000, how much will
be paid at 50% completion?
17.A progress billing cycle is every month. If a project duration is 12 months and
the contract is worth ₱60,000,000, what is the average monthly progress
billing assuming even distribution?
18.A contractor received a down payment of 15% on a ₱100,000,000 project.
How much is the down payment amount?
19.If a project has a 5% retention policy and a 10% withholding tax per progress
billing, how much will be deducted from a ₱6,000,000 billing?
20.A contractor submits a final billing of ₱8,000,000, including all remaining
retention. If ₱1,500,000 was previously retained, how much is the actual
progress billing amount?
These problems cover basic and advanced concepts in progress billing for
construction engineering. Let me know if you need solutions or more complex
scenarios! 🚧🔢
4o
You said:
can i have the solution for each question
ChatGPT said:
Here are the solutions for each of the 20 sample problems related to progress
billing in construction engineering:

A. Basic Progress Billing Computations

1. First Billing Based on Work Completion
Problem: A contractor is working on a ₱40,000,000 project. After the first month,
20% of the work is completed. How much should be billed?
Solution:
Billing Amount = 20% of ₱40,000,000
= ₱8,000,000

2. Second Billing Based on Additional Work Done

Problem: After the second month, 45% of the work is completed. The first billing
covered 20% of the work. How much should be billed now?
Solution:
Total Work Done = 45% of ₱40,000,000 = ₱18,000,000
Previous Billing = ₱8,000,000
Second Billing = ₱18,000,000 - ₱8,000,000
= ₱10,000,000

3. Third Billing Adjustment

Problem: The project reaches 70% completion. The previous billings covered
45%. What is the third billing amount?
Solution:
Total Work Done = 70% of ₱40,000,000 = ₱28,000,000
Previous Billings = ₱18,000,000
Third Billing = ₱28,000,000 - ₱18,000,000
= ₱10,000,000
B. Retention and Withholding Tax
4. 10% Retention Deduction
Problem: A contractor submits a ₱6,000,000 progress billing with 10% retention.
How much is retained?
Solution:
Retention = 10% of ₱6,000,000 = ₱600,000

5. Net Payment After Retention and VAT

Problem: The progress billing is ₱5,000,000, subject to 12% VAT and 10%
retention. What is the net payment?
Solution:
VAT = 12% of ₱5,000,000 = ₱600,000
Gross Billing = ₱5,000,000 + ₱600,000 = ₱5,600,000
Retention = 10% of ₱5,000,000 = ₱500,000
Net Amount = ₱5,100,000

6. Withholding Tax Deduction

Problem: The progress billing is ₱4,500,000 with a 5% withholding tax. How
much will be deducted?
Solution:
Withholding Tax = 5% of ₱4,500,000 = ₱225,000

C. Mobilization Advance
7. Mobilization Advance Deduction
Problem: A contractor received a ₱3,000,000 advance, deducted at 15% per
billing. The progress billing is ₱7,000,000. How much is deducted?
Solution:
Deduction = 15% of ₱3,000,000 = ₱450,000
Net Billing = ₱7,000,000 - ₱450,000
= ₱6,550,000

D. Liquidated Damages (LD)

8. LD Deduction Due to Delay
Problem: A contractor delayed the project by 10 days. The LD penalty is ₱12,000
per day. How much will be deducted?
Solution:
LD = 10 × ₱12,000 = ₱120,000
E. Subcontractor Payments
9. Deducting Subcontractor Costs
Problem: A contractor’s billing is ₱6,800,000, but ₱2,000,000 is due to
subcontractors. How much is the net billing?
Solution:
Net Billing = ₱6,800,000 - ₱2,000,000
= ₱4,800,000

F. Variation Orders
10. Variation Order Increase
Problem: The original contract price is ₱30,000,000. A variation order of
₱2,800,000 is approved. What is the new contract price?
Solution:
New Contract Price = ₱30,000,000 + ₱2,800,000
= ₱32,800,000

G. 40 More Problems

Final
Scenario Computation
Answer

11. Additional Tax Deduction (VAT + ₱7,202,50

(₱6,500,000 - 5%) + 12%
Withholding Tax) 0

12. Cost Escalation Due to Inflation ₱19,080,0

₱18,000,000 × 1.06
(6%) 00

13. 50% Retention Release 50% of ₱1,200,000 ₱600,000

₱9,850,00
14. Billing Net of LD ₱10,000,000 - ₱150,000
0

15. Payment Deduction Due to ₱3,700,00

₱4,000,000 - ₱300,000
Defective Work 0

16. Final Retention Release ₱500,000 - ₱500,000 ₱0

17. Progress Billing for 85% ₱10,200,0

85% of ₱12,000,000
Completion 00

18. Deduction for Delayed ₱7,400,00

₱8,000,000 - ₱600,000
Subcontractor Work 0
 Final
Scenario Computation
Answer

₱9,500,000 - (10% retention ₱8,075,00

19. Net Payment After All Deductions
+ 5% tax) 0

₱15,120,0
20. Adjusted Billing with Escalation ₱14,000,000 × 1.08
00

Basic Computation Problems

1.
Given:
 Contract Price = ₱10,000,000
 Work Completed = 30%
Solution:
Progress Billing = 30% × ₱10,000,000
= ₱3,000,000 ✅

2.
Given:
 Progress Billing = ₱2,000,000
 Retention = 10%
Solution:
Retained Amount = 10% × ₱2,000,000
= ₱200,000 ✅

3.
Given:
 Contract Price = ₱15,000,000
 Work Completed = 40%
 Retention = 5%
Solution:
Gross Billing = 40% × ₱15,000,000 = ₱6,000,000
Retained Amount = 5% × ₱6,000,000 = ₱300,000
Net Billing = ₱6,000,000 - ₱300,000 = ₱5,700,000 ✅
4.
Given:
 Progress Billing = ₱5,000,000
 Retention = 8%
Solution:
Retained Amount = 8% × ₱5,000,000 = ₱400,000
Net Billing = ₱5,000,000 - ₱400,000 = ₱4,600,000 ✅

5.
Given:
 Contract Price = ₱50,000,000
 Work Completed = 60%
Solution:
Progress Billing = 60% × ₱50,000,000
= ₱30,000,000 ✅

Retainage and Deduction Problems

6.
Given:
 Progress Billing = ₱3,500,000
 Retention = 10%
 VAT Deduction = 12%
Solution:
Retained Amount = 10% × ₱3,500,000 = ₱350,000
VAT Deduction = 12% × ₱3,500,000 = ₱420,000
Net Billing = ₱3,500,000 - ₱350,000 - ₱420,000
= ₱2,730,000 ✅

7.
Given:
 Total Billings = ₱20,000,000
 Retention = 5%
Solution:
 Retained Amount = 5% × ₱20,000,000
= ₱1,000,000 ✅

8.
Given:
 Progress Billing = ₱4,000,000
 Withholding Tax = 10%
 Retention = 8%
Solution:
Retained Amount = 8% × ₱4,000,000 = ₱320,000
Withholding Tax = 10% × ₱4,000,000 = ₱400,000
Net Billing = ₱4,000,000 - ₱320,000 - ₱400,000
= ₱3,280,000 ✅

9.
Given:
 Retained Amount = ₱2,000,000
 Release at 95% completion
Solution:
₱2,000,000 will be released ✅

10.
Given:
 Subcontractor's Billing = ₱1,200,000
 Retention = 5%
Solution:
Retained Amount = 5% × ₱1,200,000 = ₱60,000
Net Billing = ₱1,200,000 - ₱60,000
= ₱1,140,000 ✅

Variation Orders & Adjustments

11.
Given:
 Original Price = ₱25,000,000
  Increase = 10%
Solution:
Increase Amount = 10% × ₱25,000,000 = ₱2,500,000
New Price = ₱25,000,000 + ₱2,500,000 = ₱27,500,000 ✅

12.
Given:
 Previous Billing = ₱3,000,000
 Variation Order = ₱500,000
Solution:
New Billing = ₱3,000,000 + ₱500,000 = ₱3,500,000 ✅

13.
Given:
 New Contract Price = ₱40,000,000 + ₱4,500,000 = ₱44,500,000
 Work Completed = 50%
Solution:
Progress Billing = 50% × ₱44,500,000
= ₱22,250,000 ✅

14.
Given:
 New Contract Price = ₱20,000,000 - ₱1,000,000 = ₱19,000,000
 Work Completed = 75%
Solution:
Progress Billing = 75% × ₱19,000,000
= ₱14,250,000 ✅

15.
Given:
 Current Billing = ₱5,000,000
 Additional Cost = ₱750,000
Solution:
New Billing = ₱5,000,000 + ₱750,000
= ₱5,750,000 ✅
Cash Flow and Payment Schedule Problems
16.
Given:
 Contract Price = ₱30,000,000
 Payment at 50% completion = 25%
Solution:
Payment = 25% × ₱30,000,000
= ₱7,500,000 ✅

17.
Given:
 Contract Price = ₱60,000,000
 Duration = 12 months
Solution:
Average Monthly Billing = ₱60,000,000 ÷ 12
= ₱5,000,000 ✅

18.
Given:
 Down Payment = 15%
 Contract Price = ₱100,000,000
Solution:
Down Payment Amount = 15% × ₱100,000,000
= ₱15,000,000 ✅

19.
Given:
 Progress Billing = ₱6,000,000
 Retention = 5%
 Withholding Tax = 10%
Solution:
Retained Amount = 5% × ₱6,000,000 = ₱300,000
 Withholding Tax = 10% × ₱6,000,000 = ₱600,000
Total Deduction = ₱900,000 ✅

20.
Given:
 Final Billing = ₱8,000,000
 Retention Released = ₱1,500,000
Solution:
Net Billing = ₱8,000,000 - ₱1,500,000
= ₱6,500,000 ✅