Problem 5-10 Percentage-of-completion method [LO5-8, 5-9]

In 2016, 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 2018. Information related to the contract is as follows:

	2016			2017			2018
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.

Required:

1.		Calculate the amount of revenue and gross profit to be recognized in each of the three years