In 2021, Montana Corp. entered into a contract to begin work on a two-year project. Montana recognizes revenue over time according to percentage of completion for this contract, and provides the following information (dollars in millions): Accounts receivable, 12/31/2021 (from construction progress billings) $37.5 $140 Actual construction costs incurred in 2021 Cash collected on project during 2021 $105 Construction in progress, 12/31/2021 Estimated percentage of completion during 2021 Selected Amounts O $70,000,000 O $60,000,000 $35,000,000 O $105,000,000 $210 What is the amount of gross profit on the project recognized by Montana during 2021? 50 %

In 2021, Montana Corp. entered into a contract to begin work on a two-year project. Montana recognizes revenue over time according to percentage of completion for this contract, and provides the following information (dollars in millions): Accounts receivable, 12/31/2021 (from construction progress billings) $37.5 $140 Actual construction costs incurred in 2021 Cash collected on project during 2021 $105 Construction in progress, 12/31/2021 Estimated percentage of completion during 2021 Selected Amounts O $70,000,000 O $60,000,000 $35,000,000 O $105,000,000 $210 What is the amount of gross profit on the project recognized by Montana during 2021? 50 %

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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: Cost incurred during the year Estimated costs to complete as of year-end Billings during the year Cash collections during the year Assume that Westgate Construction's contract with Santa Clara County does not qualify for revenue recognition over time. Required: 1. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years. 2-a. In the journal below, complete the necessary journal entries for the year 2024 (credit "Cash, Materials, etc." for construction costs incurred). 2024 $ 2,739,000 5,561,000 2,300,000 2,100,000 Cost incurred during the year Estimated costs to complete as of year-end 2025 $ 3,735,000 1,826,000 4,174,000 3,900,000 2024 $ 2,430,000 5,630,000 2-b. In the journal below, complete the necessary journal entries for the year…
6) 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 $ 2,100,000 $ 2,450,000 $ 2,695,000 Estimated costs to complete as of year-end 4,900,000 2,450,000 0 Billings during the year 2,200,000 2,350,000 5,450,000 Cash collections during the year 1,900,000 2,300,000 5,800,000 Westgate recognizes revenue over time according to percentage of completion. 5. 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…
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: Cost incurred during the year Estimated costs to complete as of year-end Billings during the year Cash collections during the year 2021 $2,100,000 2023 $2,695,000 2022 $2,450,000 4,900,000 2,450,000 2,200,000 2,350,000 5,450,000 1,900,000 2,300,000 5,800,000 Westgate recognizes revenue over time according to percentage of completion. Ø 2-a. In the journal below, complete the necessary journal entries for the year 2021 (credit "Various accounts" for construction costs incurred). 2-b. In the journal below, complete the necessary journal entries for the year 2022 (credit "Various accounts" for construction costs incurred). 2-c. In the journal below, complete the necessary journal entries for…
Required information [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: Cost incurred during the year Estimated costs to complete as of year-end Billings during the year Cash collections during the year Westgate recognizes revenue over time according to percentage of completion. Costs incurred during the year Estimated costs to complete as of year-end Revenue Gross profit (loss) 2024 $ 2,184,000 5,616,000 2,120,000 1,860,000 2024 2025 5. 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…
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 $ 2,100,000 $ 2,450,000 $ 2,695,000 Estimated costs to complete as of year-end 4,900,000 2,450,000 0 Billings during the year 2,200,000 2,350,000 5,450,000 Cash collections during the year 1,900,000 2,300,000 5,800,000 Westgate recognizes revenue over time according to percentage of completion. 2-a. In the journal below, complete the necessary journal entries for the year 2021 (credit "Various accounts" for construction costs incurred).2-b. In the journal below, complete the necessary journal entries for the year 2022 (credit "Various accounts" for construction costs incurred).2-c. In the journal below, complete the necessary journal entries for the year 2023…
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: Cost incurred during the year Estimated costs to complete as of year-end Billings during the year Cash collections during the year 2021 $2,100,000 2022 $3,150,000 2023 $2,475,000 5,400,000 2,150,000 2,250,000 3,100,000 8 1,875,000 3,100,000 4,750,000 5,025,000 Westgate recognizes revenue over time according to percentage of completion. 3. Complete the information required below to prepare a partial balance sheet for 2021 and 2022 showing any items related to the contract. (Do not round intermediate calculations.) Balance Sheet (Partial) Current assets Current liabilities: 2021 2022 0 0
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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: Cost incurred during the year Estimated costs to complete as of year-end Billings during the year Cash collections during the year Westgate recognizes revenue over time according to percentage of completion. Revenue Gross profit (loss) 2021 2022 $2,610,000 $3,162,000 6,390,000 2,028,000 2,100,000 1,850,000 2021 2022 Required: 1. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years. (Do not round intermediate calculations. Loss amounts should be indicated with a minus sign.) 2023 $2,230,800 2023 0 3,672,000 4,228,000 5,150,000 3,000,000
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Required information [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: Cost incurred during the year Estimated costs to complete as of year-end Billings during the year Cash collections during the year Westgate recognizes revenue over time according to percentage of completion. Revenue Gross profit (loss) 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. $ $ 2024 3,000,000 $ 510,000 $ 2025 2024 $ 2,490,000 5,810,000 2,030,000 1,815,000 8,342,000 $ 2,358,000 $ 2026 2025 $ 3,984,000 1,826,000 4,444,000 3,900,000 1,658,000 -350,600 2026 $ 2,008,600 0 3,526,000 4,285,000
Required Information [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: Cost incurred during the year Estimated costs to complete as of year-end Billings during the year Cash collections during the year Westgate recognizes revenue over time according to percentage of completion. Revenue Gross profit (loss) S 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. 2024 1,060,000 2024 2025 $ 2,604,000 $ 4,032,000 5,796,000 1,764,000 2,040,000 1,820,000 2025 2026 4,596,000 4,000,000 2026 $ 1,940, 400 0 3,364,000 4,180,000