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I need this question answered assuming that Westgate Construction's contract with Santa Clara County does NOT qualify for revenue recongnition over time... In 2016, the
I need this question answered assuming that Westgate Construction's contract with Santa Clara County does NOT qualify for revenue recongnition over time... In 2016, 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 2018. Information related to the contract is as follows:
2016 | 2017 | 2018 | ||||||
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 |
****IMPORTANT - Complete the requirements assuming that Westgate Construction's contract with Santa Clara County does NOT qualify for revenue recongnition over time.**** |
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 2016 (credit "Various accounts" for construction costs incurred). |
2-b. In the journal below, complete the necessary journal entries for the year 2017 (credit "Various accounts" for construction costs incurred). |
2-c. In the journal below, complete the necessary journal entries for the year 2018 (credit "Various accounts" for construction costs incurred). |
3. Complete the information required below to prepare a partial balance sheet for 2016 and 2017 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. |
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