In 2013, 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 2015. Information related to the contract is as follows:

	2013			2014			2015
Cost incurred during the year	$	3,600,000		$	4,050,000		$	1,485,000
Estimated costs to complete as of year-end		5,400,000			1,350,000			0
Billings during the year		3,000,000			4,650,000			2,350,000
Cash collections during the year		2,700,000			4,600,000			2,600,000

Westgate uses the completed contract method of accounting for long-term construction contracts.

Required:Calculate the amount of gross profit (loss) to be recognized in each of the three years

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	2013	2014	2015
Gross profit (loss)

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2.1

In the journal below, complete the necessary journal entries for the year 2013 (credit various accounts for construction costs incurred). (If no entry is required for a particular transaction, select "No journal entry required" in the first account field.)

Journal Entry Worksheet

• Record the construction costs.
• Record the progress billings.
• Record the cash collections.
• Record the gross profit.

Year

General Journal

Debit

Credit

2013

2.2

In the journal below, complete the necessary journal entries for the year 2014 (credit various accounts for construction costs incurred). (If no entry is required for a particular transaction, select "No journal entry required" in the first account field.)

Journal Entry Worksheet

• Record the construction costs.
• Record the progress billings.
• Record the cash collections.
• Record the gross profit.

Year

General Journal

Debit

Credit

2014

2.3

In the journal below, complete the necessary journal entries for the year 2015 (credit various accounts for construction costs incurred). (If no entry is required for a particular transaction, select "No journal entry required" in the first account field.)

Journal Entry Worksheet

• Record the construction costs.
• Record the progress billings.
• Record the cash collections.
• Record the gross profit.

Year

General Journal

Debit

Credit

2015

3.

Complete the information required below to prepare a partial balance sheet for 2013 and 2014 showing any items related to the contract.

Balance sheet	2013			2014		2014
Current assets:

4.	Calculate the amount of gross profit (loss) to be recognized in each of the three years assuming the following costs incurred and costs to complete information.

	2013			2014			2015
Costs incurred during the year	$	2,500,000		$	3,850,000		$	3,300,000
Estimated costs to complete as of year-end		5,700,000			3,200,000			0

	2013	2014	2015
Gross profit (loss)

5.	Calculate the amount of gross profit (loss) to be recognized in each of the three years assuming the following costs incurred and costs to complete information.

	2013			2014			2015
Costs incurred during the year	$	2,500,000		$	3,850,000		$	4,050,000
Estimated costs to complete as of year-end		5,700,000			4,200,000			0

	2013	2014	2015
Gross profit (loss)

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