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 | $ 2,184,000 | $ 3,510,000 | $ 2,316,600 |
| Estimated costs to complete as of year-end | 5,616,000 | 2,106,000 | 0 |
| Billings during the year | 2,120,000 | 3,574,000 | 4,306,000 |
| Cash collections during the year | 1,860,000 | 3,400,000 | 4,740,000 |
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, assuming the following costs incurred and costs to complete information.
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Oil And Gas Accounting
Authors: Steven M. Bragg
2nd Edition
1642210668, 9781642210668
