Question
Problem 6-10 (Static) Long-term contract; revenue recognition over time [LO6-8, 6-9] Skip to question [The following information applies to the questions displayed below.] In 2024,
Problem 6-10 (Static) Long-term contract; revenue recognition over time [LO6-8, 6-9]
Skip to question
[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 | $ 2,400,000 | $ 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.
Problem 6-10 (Static) Part 4
4. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years, assuming the following costs incurred and costs to complete information.
Note: Do not round intermediate calculations and round your final answers to the nearest whole dollar amount. Loss amounts should be indicated with a minus sign.
| 2024 | 2025 | 2026 | |
|---|---|---|---|
| Costs incurred during the year | $ 2,400,000 | $ 3,800,000 | $ 3,200,000 |
| Estimated costs to complete as of year-end | 5,600,000 | 3,100,000 | 0 |
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Financial Accounting Theory And Analysis Text Readings And Cases
Authors: Richard G. Schroeder, Myrtle W. Clark, Jack M. Cathey
8th Edition
0471652431, 9780471652434
