Question
In 2024, 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 2024, 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 2026. Information related to the contract is as follows:
| 2024 | 2025 | 2026 | |
|---|---|---|---|
| Cost incurred during the year | $ 2,044,000 | $ 2,628,000 | $ 2,890,800 |
| Estimated costs to complete as of year-end | 5,256,000 | 2,628,000 | 0 |
| Billings during the year | 2,170,000 | 2,502,000 | 5,328,000 |
| Cash collections during the year | 1,885,000 | 2,600,000 | 5,515,000 |
Westgate recognizes revenue over time according to percentage of completion.
Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years.
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Fundamental Financial Accounting Concepts
Authors: J.K.
7th Edition
B003NPRW7I
