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 | $ 2,542,000 | $ 3,772,000 | $ 2,074,600 |
| Estimated costs to complete as of year-end | 5,658,000 | 1,886,000 | 0 |
| Billings during the year | 2,020,000 | 4,294,000 | 3,686,000 |
| Cash collections during the year | 1,810,000 | 3,800,000 | 4,390,000 |
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.
| 2024 | 2025 | 2026 | |
| Revenue | |||
| Gross profit (loss) |
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Ready Notes For Use With Managerial Accounting
Authors: Ronald W. Hilton
4th Edition
0073656518, 978-0073656519
