| 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: |
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| | 2016 | 2017 | 2018 |
| Cost incurred during the year | $ | 2,072,000 | | $ | 2,738,000 | | $ | 2,849,000 | |
| Estimated costs to complete as of year-end | | 5,328,000 | | | 2,590,000 | | | 0 | |
| Billings during the year | | 2,160,000 | | | 2,650,000 | | | 5,190,000 | |
| Cash collections during the year | | 1,880,000 | | | 2,700,000 | | | 5,420,000 | |
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| Westgate recognizes revenue over time according to percentage of completion. |
Required: 1. Calculate the amount of revenue and gross profit to be recognized in each of the three years. (Do not round intermediate calculations. Loss amounts should be indicated with a minus sign.) Answer is not complete. 2016 2017 2018 17,280,000 2,600,000 4,672,000 1,510,000 Revenue Gross profit (loss) 2. In the journal below, complete the necessary journal entries for the year 2016 (credit a. "Various accounts" for construction costs incurred). (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) X Answer is not complete. No Date General Journal Credit Debit 2,072,000 2019 Construction in progress Various accounts 2,072,000 2019 2,160,000 Accounts receivable Billings on construction contract 2,160,000 2019 1,880,000 Cash Accounts receivable 1,880,000 2019 Construction in progress Cost of construction Revenue from long-term contracts 2.072.000 2. In the journal below, complete the necessary journal entries for the year 2018 (credit c. "Various accounts" for construction costs incurred). (If no entry is required for a transaction/event, select "No journal entry required in the first account field.) Answer is not complete. | No Credit Date 2019 General Journal Construction in progress Various accounts Debit 2.849,000 2,849,000 2019 5,190,000 Accounts receivable Billings on construction contract 5,190,000 2019 5,420,000 Cash Accounts receivable 5,420,000 2019 Construction in progress Cost of construction Revenue from long-term contracts 2,849,000 3. Complete the information required below to prepare a partial balance sheet for 2016 and 2017 showing any items related to the contract. Indicate whether any of the amounts shown are contract assets or contract liabilities. (Do not round intermediate calculations.) X Answer is not complete. 2016 2017 Balance Sheet (Partial) Current assets: Accounts receivable Construction in progress Less: Billings Costs and profit in excess of billings Current liabilities: 4. Calculate the amount of revenue and gross profit to be recognized in each of the three years assuming the following costs incurred and costs to complete information. (Do not round intermediate calculations and round your final answers to the nearest whole dollar amount. Loss amounts should be indicated with a minus sign.) Cost incurred during the year Estimated costs to complete as of year-end 2016 $2,072,000 5.328.000 2017 2018 $3,880,000 $3,280,000 3,180,000 Answer is not complete. 2016 2017 2018 7,280,000 $ 2,600,000 X 2,940,000 X 6,720,000 X Revenue Gross profit (loss)
