Question
Required information 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.]
Required information
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
2-a. In the journal below, complete the necessary journal entries for the year 2024 (credit Cash, Materials, etc. for construction costs incurred).
Date 2024 General Journal Debit Credit Record entry Clear entry View general journal < Req 2A Req 2B >
Step by Step Solution
There are 3 Steps involved in it
Step: 1
To complete the journal entries for each year we will follow the percentage of completion method to recognize revenue over time Heres the detailed calculation for each year 2024 Step 1 Calculate Perce...
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Step: 2
Step: 3
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Auditing At The Speed Of Risk With An Agile Continuous Audit Plan
Authors: Norman Marks
1st Edition
B09PMBSWSC, 979-8787044393
