P 6-10 Long-term contract; revenue recognition over time CL06-8, 106-9 In 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: 2021 2022 2023 Cost incurred during the year $ 2,400,000 $ 3,600,000 $ 2,200,000 Estimated costs to complete as of year-end 5,600,000 2,000,000 -O- 2,000,000 4,000,000 4,000,000 Billings during the year Cash collections during the year 1,800,000 3,600,000 4,600,000 Westgate recognizes revenue over time according to percentage of completion. Required: 1. Calculate the amount of revenue and gross profit to be recognized in each of the three years. 2. Prepare all necessary journal entries for each of the years (credit Cash, Materials, etc." for construction costs incurred). 3. Prepare a partial balance sheet for 2021 and 2022 showing any items related to the contract. Indicate whether any of the amounts shown are contract assets or contract liabilities. 4. Calculate the amount of revenue and gross profit to be recognized in each of the three years assuming the following costs incurred and costs to complete information: 2021 2022 2023 Costs incurred during the year $ 2,400,000 $ 3,800,000 $ 3,200,000 Estimated costs to complete as of year-end 5,600,000 3,100,000 -0- 5. Calculate the amount of revenue and gross profit to be recognized in each of the three years assuming the following costs incurred and costs to complete information: 2021 2022 2023 Costs incurred during the year $ 2,400,000 $ 3,800,000 $ 3,900,000 Estimated costs to complete as of year-end 5,600,000 4,100,000 -0