Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

n 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

n 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:

202120222023Cost incurred during the year$2,079,000$3,465,000$2,371,600Estimated costs to complete of year-end5,621,0002,156,0000Billings during the year1,700,0003,844,0004,456,000Cash collections during the year1,500,0003,300,0005,200,000

Assume that Westgate Construction's 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 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.

202120222023Cost incurred during the year$2,530,000$3,865,000$3,230,000Estimated costs to complete of year-end5,730,0003,230,0000

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.

202120222023Cost incurred during the year$2,530,000$3,865,000$4,095,000Estimated costs to complete of year-end5,730,0004,230,0000

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fundamental Financial Accounting Concepts

Authors: Thomas P. Edmonds, Frances M. Mcnair, Philip R. Olds, Mark Edmonds, Christopher Edmonds

10th Edition

126015940X, 978-1260159400

More Books

Students also viewed these Accounting questions

Question

=+c) Should Shawn purchase the long-range predictions?

Answered: 1 week ago

Question

The quality of the proposed ideas

Answered: 1 week ago

Question

The number of new ideas that emerge

Answered: 1 week ago