In 2021, the Westgate Construction Company entered into a contract to construct a road for Santa Clara
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 2023. Information related to the contract is as follows:
2021 | 2022 | 2023 | |||||||
Cost incurred during the year | $ | 2,610,000 | $ | 3,162,000 | $ | 2,230,800 | |||
Estimated costs to complete as of year-end | 6,390,000 | 2,028,000 | 0 | ||||||
Billings during the year | 2,100,000 | 3,672,000 | 4,228,000 | ||||||
Cash collections during the year | 1,850,000 | 3,000,000 | 5,150,000 | ||||||
Westgate recognizes revenue over time according to percentage of completion.
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.)
2-b. In the journal below, complete the necessary journal entries for the year 2022 (credit "Various accounts" for construction costs incurred).
3. Complete the information required below to prepare a partial balance sheet for 2022 ONLY showing any items related to the contract.