Question
In 2021, 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 2021, 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 2023. Information related to the contract is as follows:
| 2021 | 2022 | 2023 | |||||||||
| Cost incurred during the year | $ | 2,291,000 | $ | 3,555,000 | $ | 2,259,400 | |||||
| Estimated costs to complete as of year-end | 5,609,000 | 2,054,000 | 0 | ||||||||
| Billings during the year | 1,900,000 | 3,946,000 | 4,154,000 | ||||||||
| Cash collections during the year | 1,700,000 | 3,500,000 | 4,800,000 | ||||||||
Assume that Westgate Constructions contract with Santa Clara County does not qualify for revenue recognition over time. Required: 1. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years.
Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years. (Leave no cells blank - be certain to enter "0" wherever required. Loss amounts should be indicated with a minus sign.)
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Managerial Accounting Creating Value in a Dynamic Business Environment
Authors: Ronald W. Hilton
9th edition
78110912, 978-0078110917
