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 2024, 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 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:
| 2024 | 2025 | 2026 | |
|---|---|---|---|
| Cost incurred during the year | $ 2,640,000 | $ 2,300,000 | $ 2,926,000 |
| Estimated costs to complete as of year-end | 6,160,000 | 2,660,000 | 0 |
| Billings during the year | 2,080,000 | 2,860,000 | 5,060,000 |
| Cash collections during the year | 1,840,000 | 2,800,000 | 5,360,000 |
Westgate recognizes revenue over time according to percentage of completion.
2-a. In the journal below, complete the necessary journal entries for the year 2024 (credit Cash, Materials, etc. for construction costs incurred).
2-b. In the journal below, complete the necessary journal entries for the year 2025 (credit Cash, Materials, etc. for construction costs incurred).
2-c. In the journal below, complete the necessary journal entries for the year 2026 (credit Cash, Materials, etc. for construction costs incurred).
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