For the question below, my responses for 1, 2 & 3 are correct. For the life of me I can' see where I went wrong with 4 and 5. Any help will be appreciated.
In 2021, 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 2023. Information related to the contract is as follows: 2023 $1,645,600 Cost incurred during the year Estimated costs to complete as of year-end Billings during the year Cash collections during the year 2021 $ 3,344,000 5,456,000 2,800,000 2,600,000 2022 $ 3,960,000 1,496,000 4,584,000 4,400,000 2,696,000 3,000,000 Assume that Westgate Construction's contract with Santa Clara County does not qualify for revenue recognition over time. 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 2021 (credit "Various accounts for construction costs incurred). 2-b. In the journal below, complete the necessary journal entries for the year 2022 (credit "Various accounts" for construction costs incurred). 2-c. In the journal below, complete the necessary journal entries for the year 2023 (credit "Various accounts for construction costs incurred). 3. Complete the information required below to prepare a partial balance sheet for 2021 and 2022 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. Cost incurred during the year $2,480,000 $3,840,000 $3,280,000 Estimated costs to complete as of year-end 5,680,000 3,180,000 2021 2022 2023 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. Cost incurred during the year Estimated costs to complete as of year-end 2021 $2,480,000 5,680,000 2022 $3,840,000 4,180,000 2023 $4,020,000 @ 4 2021 2,480,000 5,680,000 Costs incurred during the year estimated costs to complete year end 2022 3,840,000 3,180,000 2023 3,280,000 Billings during the year 2,000,000 4,000,000 4,000,000 3,280,000 9,600,000 Cost incured during the year cummulative costs add ETC as of year end Estimated total costs 2,480,000 2,480,000 5,680,000 8,160,000 3,840,000 6,320,000 3,180,000 9,500,000 9,600,000 Contract price less: cummulative costs to date to 2023 Estimated gross profit 10,000,000 9,600,000 400,000 expected a value, other $0 values correct 2021 2022 0,000 incorrect Contract Value Completed less revenue recognized Revenue to be recognized Less: costs incurred Profit (Loss) 10,000,000 (9,600,000) 400,000 5 Costs incurred during the year estimated costs to complete year end 2021 2,480,000 5,680,000 2022 3,840,000 4,180,000 2023 4,020,000 Billings during the year 2,800,000 4,504,000 2,696,000 Cost incured during the year cummulative costs add ETC as of year end Estimated total costs 4,020,000 10,340,000 2,480,000 2,480,000 5,680,000 8,160,000 3,840,000 6,320,000 4,180,000 10,500,000 10,340,000 Contract price less: cummulative costs to date to 2023 Estimated gross profit 10,000,000 10,340,000 (340,000) expected a value, all other $0 values correct 2021 2022 202 00 Contract Value Completed less revenue recognized Revenue to be recognized Less: costs incurred Profit (Loss) incorrect 10,000,000 (10,340,000) (340,000)
