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In 2018, 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 2018, 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 2020. Information related to the contract is as follows:
2018 | 2019 | 2020 | |||||||
Cost incurred during the year | $ | 2,604,000 | $ | 4,032,000 | $ | 1,940,400 | |||
Estimated costs to complete as of year-end | 5,796,000 | 1,764,000 | 0 | ||||||
Billings during the year | 2,040,000 | 4,596,000 | 3,364,000 | ||||||
Cash collections during the year | 1,820,000 | 4,000,000 | 4,180,000 | ||||||
Westgate recognizes revenue over time according to percentage of completion.
Required:
1. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years. (Do not round intermediate calculations. Loss amounts should be indicated with a minus sign.)
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