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 2024 $ 2,550,000 2025 Estimated costs to complete as of year-end 5,950,000 Billings during the year 2,050,000 Cash collections during the year $ 4,250,000 1,700,000 4,750,000 2026 $ 1,870,000 e 3,200,000 1,825,000 4,100,000 4,075,000 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. 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 sign. Costs incurred during the year Estimated costs to complete as of year-end 2026 2024 $ 2,550,000 5,950,000 2025 $ 3,825,000 4,150,000 $ 3,975,000 Revenue Gross profit (loss) 2024 2025 2026 4
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 2024 $ 2,550,000 2025 Estimated costs to complete as of year-end 5,950,000 Billings during the year 2,050,000 Cash collections during the year $ 4,250,000 1,700,000 4,750,000 2026 $ 1,870,000 e 3,200,000 1,825,000 4,100,000 4,075,000 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. 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 sign. Costs incurred during the year Estimated costs to complete as of year-end 2026 2024 $ 2,550,000 5,950,000 2025 $ 3,825,000 4,150,000 $ 3,975,000 Revenue Gross profit (loss) 2024 2025 2026 4
Chapter3: Income Sources
Section: Chapter Questions
Problem 88P
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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:
Cost incurred during the year
2024
$ 2,550,000
2025
Estimated costs to complete as of year-end
5,950,000
Billings during the year
2,050,000
Cash collections during the year
$ 4,250,000
1,700,000
4,750,000
2026
$ 1,870,000
e
3,200,000
1,825,000
4,100,000
4,075,000
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.
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 sign.
Costs incurred during the year
Estimated costs to complete as of year-end
2026
2024
$ 2,550,000
5,950,000
2025
$ 3,825,000
4,150,000
$ 3,975,000
Revenue
Gross profit (loss)
2024
2025
2026
4
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