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
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 | ||||||
I bolded areas I need help with: |
NEED ANSWERED:
NEED ANSWERED:
Req 1 Req 2A Req 2B Req 20 Req 3 Req 4 Req 5 Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years. (Do not round intermediate calculations. Loss amounts should be indicated with a minus sign.) 2018 2019 2020 $3,000,000 $4,500,000 $2,500,000 S 600,000 $ 900,000 $ 300,000 Revenue Gross profit (loss)
Step by Step Solution
3.48 Rating (165 Votes )
There are 3 Steps involved in it
Step: 1
Answer Given Westgate constr...See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started