Question
Problem 6-10 (Algo) Long-term contract; revenue recognition over time [LO6-8, 6-9] [The following information applies to the questions displayed below.] In 2021, the Westgate Construction
Problem 6-10 (Algo) Long-term contract; revenue recognition over time [LO6-8, 6-9]
[The following information applies to the questions displayed below.] 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 | $ | 2,059,000 | $ | 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 6-10 (Algo) Part 2
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).
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