Question
Problem 5-10 Long-term contract; revenue recognition over time [LO5-8, 5-9] [The following information applies to the questions displayed below.] In 2018, the Westgate Construction Company
Problem 5-10 Long-term contract; revenue recognition over time [LO5-8, 5-9]
[The following information applies to the questions displayed below.] In 2018, 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 2020. Information related to the contract is as follows:
2018 | 2019 | 2020 | |||||||
Cost incurred during the year | $ | 2,059,000 | $ | 2,627,000 | $ | 2,655,400 | |||
Estimated costs to complete as of year-end | 5,041,000 | 2,414,000 | 0 | ||||||
Billings during the year | 2,190,000 | 2,496,000 | 5,314,000 | ||||||
Cash collections during the year | 1,895,000 | 2,400,000 | 5,705,000 | ||||||
Westgate recognizes revenue over time according to percentage of completion.
Problem 5-10 Part 1
Required:
1. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years. (Do not round intermediate calculations. Loss amounts should be indicated with a minus sign.)
Problem 5-10 Long-term contract; revenue recognition over time [LO5-8, 5-9]
[The following information applies to the questions displayed below.] In 2018, 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 2020. Information related to the contract is as follows:
2018 | 2019 | 2020 | |||||||
Cost incurred during the year | $ | 2,059,000 | $ | 2,627,000 | $ | 2,655,400 | |||
Estimated costs to complete as of year-end | 5,041,000 | 2,414,000 | 0 | ||||||
Billings during the year | 2,190,000 | 2,496,000 | 5,314,000 | ||||||
Cash collections during the year | 1,895,000 | 2,400,000 | 5,705,000 | ||||||
Westgate recognizes revenue over time according to percentage of completion.
3. Complete the information required below to prepare a partial balance sheet for 2018 and 2019 showing any items related to the contract. (Do not round intermediate calculations.)
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