Question
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
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 | $ | 2,156,000 | $ | 3,388,000 | $ | 2,371,600 | |||
Estimated costs to complete as of year-end | 5,544,000 | 2,156,000 | 0 | ||||||
Billings during the year | 2,130,000 | 3,414,000 | 4,456,000 | ||||||
Cash collections during the year | 1,865,000 | 3,300,000 | 4,835,000 | ||||||
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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.) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue 2016 2017 2018 Gross Profit 2016 2017 2018 2. In the journal below, complete the necessary journal entries for the year 2016 (credit "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.)
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