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: FIX

	2018			2019			2020
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

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. 2-a. In the journal below, complete the necessary journal entries for the year 2018 (credit "Various accounts" for construction costs incurred). 2-b. In the journal below, complete the necessary journal entries for the year 2019 (credit "Various accounts" for construction costs incurred). 2-c. In the journal below, complete the necessary journal entries for the year 2020 (credit "Various accounts" for construction costs incurred). 3. Complete the information required below to prepare a partial balance sheet for 2018 and 2019 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.

	2018			2019			2020
Cost incurred during the year	$	2,400,000		$	3,800,000		$	3,200,000
Estimated costs to complete as of year-end		5,600,000			3,100,000			0

5. 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.

	2018			2019			2020
Cost incurred during the year	$	2,400,000		$	3,800,000		$	3,900,000
Estimated costs to complete as of year-end		5,600,000			4,100,000			0

Q2:

Fix

Problem 5-12 Long-term contract; revenue recognized over time; loss projected on entire project [LO5-9]

Curtiss Construction Company, Inc., entered into a fixed-price contract with Axelrod Associates on July 1, 2018, to construct a four-story office building. At that time, Curtiss estimated that it would take between two and three years to complete the project. The total contract price for construction of the building is $4,000,000. Curtiss concludes that the contract does not qualify for revenue recognition over time. The building was completed on December 31, 2020. Estimated percentage of completion, accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings to Axelrod under the contract were as follows:

	At 12-31-2018				At 12-31-2019				At 12-31-2020
Percentage of completion		10	%			60	%			100	%
Costs incurred to date	$	350,000			$	2,500,000			$	4,250,000
Estimated costs to complete		3,150,000				1,700,000				0
Billings to Axelrod, to date		720,000				2,170,000				4,000,000

Required: 1. Compute gross profit or loss to be recognized as a result of this contract for each of the three years. 2. Assuming Curtiss recognizes revenue over time according to percentage of completion, compute gross profit or loss to be recognized in each of the three years. 3. Assuming Curtiss recognizes revenue over time according to percentage of completion, compute the amount to be shown in the balance sheet at the end of 2018 and 2019 as either cost in excess of billings or billings in excess of costs.

Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below Req 3 Req 5 Req 2A Req 2B Req 2C Req 1 Req 4 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.) 2018 2019 2020 Revenue 3,000,0004,500,000 2,500,000 Gross profit 600,000 900,000 300,000 OSs Req 2A> Req 1 In the journal below, complete the necessary journal entries for the year 2018 (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.) Date General Journal Debit Credit 0 2019 Construction in progress 2,400,000 2400,000 Various accounts 2019 2,000,000 Acco unts receivable Billings on construction contract 2,000,000 2019 Cash 1,800,000 unts receivable 1,800,000 4 2019 Cost of construction 2,400,000 Construction in progress 600,000 3,000,000 Revenue from long-term contracts In the journal below, complete the necessary journal entries for the year 2019 (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.) Date General Journal Debit Credit 2019 Construction in progress 3,600,000 3,600,000 Various accounts 4,000,000 2019 Accounts receivable Billings on construction contract 4,000,000 3,600,000 2019 Cash 3,600,000 Accounts receivable 3,600,000 4 2019 Cost of construction Construction in progress 900,000 Revenue from long-term contracts 4,500,000 In the journal below, complete the necessary journal entries for the year 2020 (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.) Debit Date General Journal Credit 2020 Construction in progress 2,200,000 2.200.000 Various accounts 2020 Acco unts receivable 4,000,000 4,000,000 Billings on construction contract 2020 Cash 4,600,000 unts receivable 4,600,000 >| 2,200,000 4 2020 Cost of construction Construction in progress 300,000 Revenue from long-term contracts 2,500,000 Req 3 Req 1 Req 2A Req 2C Req 4 Req 2B Req 5 Complete the information required below to prepare a partial balance sheet for 2018 and 2019 showing any items related to the contract. (Do not round intermediate calculations.) Balance Sheet (Partial) 2018 2019 Current assets $ 600,000 Accounts receivable $ 200,000 S 3,000,000 (2,000,000) $7,500,000 (6,000,000) Construction in progress Less: Billings Costs and profit in excess of billings 1,000,000 1,500,000 Current liabilities Req 4 K Req 2C Answer is complete but not entirely correct Complete this question by entering your answers in the tabs below. Req 2A Req 1 Req 2B Req 2C Req 3 Req 4 Req 5 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. (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.) 2020 2018 2019 3,000,000 3,667,000 3,333,000 Revenue Gross proft loss) 600,000 (133,333) 133,333 K Req 3 Req 5 > Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B Req 4 Req 2C Req 3 Req 5 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. (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.) 2018 2019 2020 3,000,000 3,019,400 3,980,600 600,000 (300,000) 100,000 Revenue Gross profit oss