P 6-10 Long-term contract; revenue recognition over time LO6-8, LO6-9 value of the license to Lyon during the five-year license period. 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: Cost incurred during the year 2026 2024 2025 $2,400,000 $3,600,000 $2,200,000 Estimated costs to complete as of year-end 5,600,000 2,000,000 0 Billings during the year 2,000,000 4,000,000 4,000,000 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 2024 and 2025 showing any items related to the contract. Indicate whether of the amounts shown are contract assets or contract liabilities. any 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: Costs incurred during the year Estimated costs to complete as of year-end 2024 2025 $2,400,000 5,600,000 $3,800,000 3,100,000 2026 $3,200,000 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: P 6-11 Long-term contract; revenue recognition upon completion LO6-9 Costs incurred during the year Estimated costs to complete as of year-end 2024 $2,400,000 5,600,000 2025 $3,800,000 4,100,000 2026 $3,900,000 0 [This is a variation of P 6-10 modified to focus on revenue recognition upon project completion.] Required: Complete the requirements of P 6-10, assuming that Westgate Construction's contract with Santa Clara County does not qualify for revenue recognition over time.