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 | $ 2,072,000 | $ 2,738,000 | $ 2,849,000 |
| Estimated costs to complete as of year-end | 5,328,000 | 2,590,000 | 0 |
| Billings during the year | 2,160,000 | 2,650,000 | 5,190,000 |
| Cash collections during the year | 1,880,000 | 2,700,000 | 5,420,000 |
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.
Note: Do not round intermediate calculations. Loss amounts should be indicated with a minus sign.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Principles Of Cost Accounting
Authors: Edward J. Vanderbeck
15th Edition
978-0840037039, 0840037031
