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 as follows: Cost incurred during the year Estimated costs to complete as of year-end 2024 2025 $ $ 2,610,000 3, 162,000 6,390,000 2,028,000 2026 2,230, 800 0
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 as follows: Cost incurred during the year Estimated costs to complete as of year-end 2024 2025 $ $ 2,610,000 3, 162,000 6,390,000 2,028,000 2026 2,230, 800 0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Problem 6-10 (Algo) Long-term contract; revenue recognition over time [LO6-8, 6-9]
[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:
Costs incurred during the year
Estimated costs to complete as of
year-end
Revenue
Gross profit (loss)
2024
2024
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.
2025
$
2,610,000 3,162,000 2,230, 800
6,390,000 2,028,000
0
2025
$
Problem 6-10 (Algo) Part 5
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.
2024
$ 2,610,000
6,390,000
2026
$
2,100,000 3,672,000 4,228,000
1,850,000 3,000,000 5,150,000
2026
2025
$ 3,850,000
4,200,000
2026
$ 4,050,000
0](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F734954fb-fae0-4366-b2ce-e1efb24819e4%2Fd3f5ef22-e6ed-48a1-b36f-720ab7b86755%2F0gxahi4i_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Problem 6-10 (Algo) Long-term contract; revenue recognition over time [LO6-8, 6-9]
[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:
Costs incurred during the year
Estimated costs to complete as of
year-end
Revenue
Gross profit (loss)
2024
2024
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.
2025
$
2,610,000 3,162,000 2,230, 800
6,390,000 2,028,000
0
2025
$
Problem 6-10 (Algo) Part 5
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.
2024
$ 2,610,000
6,390,000
2026
$
2,100,000 3,672,000 4,228,000
1,850,000 3,000,000 5,150,000
2026
2025
$ 3,850,000
4,200,000
2026
$ 4,050,000
0
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