FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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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
Cost
incurred $
$
during the 2,640,000 2,300,000
year
Estimated
costs to
complete 6,160,000 2,660,000 0
as of year-
end
year
Cash
collections
during the
year
2026
$
2,926,000
Billings
during the 2,080,000 2,860,000 5,060,000
1,840,000 2,800,000 5,360,000
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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Transcribed Image Text: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 Cost incurred $ $ during the 2,640,000 2,300,000 year Estimated costs to complete 6,160,000 2,660,000 0 as of year- end year Cash collections during the year 2026 $ 2,926,000 Billings during the 2,080,000 2,860,000 5,060,000 1,840,000 2,800,000 5,360,000 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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