Question
Required information [The following information applies to the questions displayed below.] In 2021, the Westgate Construction Company entered into a contract to construct a road
Required information
[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 | $ | 2,604,000 | $ | 4,032,000 | $ | 1,940,400 | |||
| Estimated costs to complete as of year-end | 5,796,000 | 1,764,000 | 0 | ||||||
| Billings during the year | 2,040,000 | 4,596,000 | 3,364,000 | ||||||
| Cash collections during the year | 1,820,000 | 4,000,000 | 4,180,000 | ||||||
Westgate recognizes revenue over time according to percentage of completion.
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. (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.)
| 2021 | 2022 | 2023 | |||||||
| Costs incurred during the year | $ | 2,604,000 | $ | 3,820,000 | $ | 3,220,000 | |||
| Estimated costs to complete as of year-end | 5,796,000 | 3,120,000 | 0 | ||||||
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Financial Accounting in an Economic Context
Authors: Jamie Pratt
8th Edition
9781118139424, 9781118139431, 470635290, 1118139429, 1118139437, 978-0470635292
