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 | $ | 1,491,000 | $ | 3,195,000 | $ | 2,655,400 | |||||
| Estimated costs to complete as of year-end | 5,609,000 | 2,414,000 | 0 | ||||||||
| Billings during the year | 1,100,000 | 3,586,000 | 5,314,000 | ||||||||
| Cash collections during the year | 900,000 | 2,700,000 | 6,400,000 | ||||||||
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. 2-a. In the journal below, complete the necessary journal entries for the year 2021 (credit "Various accounts" for construction costs incurred). 2-b. In the journal below, complete the necessary journal entries for the year 2022 (credit "Various accounts" for construction costs incurred). 2-c. In the journal below, complete the necessary journal entries for the year 2023 (credit "Various accounts" for construction costs incurred). 3. Complete the information required below to prepare a partial balance sheet for 2021 and 2022 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.
| 2021 | 2022 | 2023 | |||||||||
| Cost incurred during the year | $ | 2,590,000 | $ | 3,895,000 | $ | 3,290,000 | |||||
| Estimated costs to complete as of year-end | 5,790,000 | 3,290,000 | 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.
| 2021 | 2022 | 2023 | |||||||||
| Cost incurred during the year | $ | 2,590,000 | $ | 3,895,000 | $ | 4,185,000 | |||||
| Estimated costs to complete as of year-end | 5,790,000 | 4,290,000 | 0 | ||||||||
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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In the journal below, complete the necessary journal entries for the year 2021 (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.)
Journal entry worksheet
Record the construction costs. (2021-2023)
Note: Enter debits before credits.
Record the progress billings. (2021-2023)
Note: Enter debits before credits.
Record the cash collections.(2021-2023)
Note: Enter debits before credits.
Record the gross profit (loss). (2021-2023)
Note: Enter debits before credits.
Complete the information required below to prepare a partial balance sheet for 2021 and 2022 showing any items related to the contract.
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Record the gross profit (loss).Balance Sheet (Partial) 2021 2022 Current assets: Current liabilities:
Note: Enter debits before credits.
Complete the information required below to prepare a partial balance sheet for 2021 and 2022 showing any items related to the contract.
Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years using the above information. (Leave no cells blank - be certain to enter "0" wherever required. Loss amounts should be indicated with a minus sign.)
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Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years using the above information. (Leave no cells blank - be certain to enter "0" wherever required. Loss amounts should be indicated with a minus sign.)
|
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Advanced Accounting
Authors: Joe Hoyle, Thomas Schaefer, Timothy Doupnik
10th edition
0-07-794127-6, 978-0-07-79412, 978-0077431808
