In 2011, the Westgate Construction Company entered into a contract to construct a road for Santa Clara

Question:

In 2011, 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 2013. Information related to the contract is as follows:

Westgate uses the percentage-of-completion method of accounting for long-term construction contracts.

Required:
1. Calculate the amount of gross profit to be recognized in each of the three years.
2. Prepare all necessary journal entries for each of the years (credit various accounts for construction costs incurred).
3. Prepare a partial balance sheet for 2011 and 2012 showing any items related to the contract.
4. Calculate the amount of gross profit to be recognized in each of the three years assuming the following costs incurred and costs to complete information:

5. Calculate the amount of gross profit to be recognized in each of the three years assuming the following costs incurred and costs to completeinformation:

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...