In 2018, the Westgate Construction Company entered into acontract to construct a road for Santa Clara County for$10,000,000. The road was completed in 2020. Information related tothe contract is as follows: 2018 2019 2020 Cost incurred during theyear $ 2,490,000 $ 3,984,000 $ 2,008,600 Estimated costs tocomplete as of year-end 5,810,000 1,826,000 0 Billings during theyear 2,030,000 4,444,000 3,526,000 Cash collections during the year1,815,000 3,900,000 4,285,000 Westgate recognizes revenue over timeaccording to percentage of completion. rev: 09_15_2017_QC_CS-99734Required: 1. Calculate the amount of revenue and gross profit(loss) to be recognized in each of the three years. (Do not roundintermediate calculations. Loss amounts should be indicated with aminus sign.)
In 2018, the Westgate Construction Company entered into acontract to construct a road for Santa Clara County for$10,000,000. The road was completed in 2020. Information related tothe contract is as follows: 2018 2019 2020 Cost incurred during theyear $ 2,490,000 $ 3,984,000 $ 2,008,600 Estimated costs tocomplete as of year-end 5,810,000 1,826,000 0 Billings during theyear 2,030,000 4,444,000 3,526,000 Cash collections during the year1,815,000 3,900,000 4,285,000 Westgate recognizes revenue over timeaccording to percentage of completion. rev: 09_15_2017_QC_CS-99734Required: 1. Calculate the amount of revenue and gross profit(loss) to be recognized in each of the three years. (Do not roundintermediate calculations. Loss amounts should be indicated with aminus sign.)
Related questions
In 2018, the Westgate Construction Company entered into a contract to construct a road for Santa Clara County for $10,000,000. The road was completed in 2020. Information related to the contract is as follows:
| 2018 | 2019 | 2020 | |||||||
| Cost incurred during the year | $ | 2,400,000 | $ | 3,600,000 | $ | 2,200,000 | |||
| Estimated costs to complete as of year-end | 5,600,000 | 2,000,000 | 0 | ||||||
| Billings during the year | 2,000,000 | 4,000,000 | 4,000,000 | ||||||
| Cash collections during the year | 1,800,000 | 3,600,000 | 4,600,000 | ||||||
Westgate recognizes revenue over time according to percentage of completion.
Required:
1. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years.
2-a. In the journal below, complete the necessary journal entries for the year 2018 (credit "Various accounts" for construction costs incurred).
2-b. In the journal below, complete the necessary journal entries for the year 2019 (credit "Various accounts" for construction costs incurred).
2-c. In the journal below, complete the necessary journal entries for the year 2020 (credit "Various accounts" for construction costs incurred).
3. Complete the information required below to prepare a partial balance sheet for 2018 and 2019 showing any items related to the contract.
4. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years assuming the following costs incurred and costs to complete information.
| 2018 | 2019 | 2020 | |||||||
| Cost incurred during the year | $ | 2,400,000 | $ | 3,800,000 | $ | 3,200,000 | |||
| Estimated costs to complete as of year-end | 5,600,000 | 3,100,000 | 0 | ||||||
5. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years assuming the following costs incurred and costs to complete information.
| 2018 | 2019 | 2020 | |||||||
| Cost incurred during the year | $ | 2,400,000 | $ | 3,800,000 | $ | 3,900,000 | |||
| Estimated costs to complete as of year-end | 5,600,000 | 4,100,000 | 0 | ||||||
