Question
Required information Skip to question [The following information applies to the questions displayed below.] In 2024, the Westgate Construction Company entered into a contract to
Required information
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 | $ 2,204,000 | $ 3,192,000 | $ 2,424,400 |
| Estimated costs to complete as of year-end | 5,396,000 | 2,204,000 | 0 |
| Billings during the year | 2,140,000 | 3,256,000 | 4,604,000 |
| Cash collections during the year | 1,870,000 | 3,200,000 | 4,930,000 |
Westgate recognizes revenue over time according to percentage of completion.
Required:
1. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years.
Note: Do not round intermediate calculations. Loss amounts should be indicated with a minus sign.
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Intermediate Accounting
Authors: J. David Spiceland, James Sepe, Mark Nelson, Wayne Thomas
9th Edition
125972266X, 9781259722660
