in 2024, the Westgate Construction Company entered into a contract to construct a road for Santa...

 

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 Estimated costs to complete as of year-end Billings during the year Cash collections during the year 2024 2025 2026 2,511,000 3,645,000 2,138,400 5,589,000 1,944,000 $ Cost incurred during the year Estimated costs to complete as of year-end $ Assume that Westgate Construction's contract with Santa Clara County does not qualify for revenue recognition over time. Cost incurred during the year Estimated costs to complete as of year-end 2,100,000 4,056,000 3,844,000 1,900,000 3,700,000 4,400,000 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). 0 2-b. In the journal below, complete the necessary journal entries for the year 2025 (credit "Cash, Materials, etc." for construction costs incurred). 2-c. In the journal below, complete the necessary journal entries for the year 2026 (credit "Cash, Materials, etc." for construction costs incurred). 3. Complete the information required below to prepare a partial balance sheet for 2024 and 2025 showing any items related to the contract. 4. 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. 2024 2025 2026 $ 2,410,000 3,885,000 3,210,000 5,610,000 3,110,000 $ 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. 2025 2026 $ $ 2024 2,410,000 3,805,000 3,915,000 5,610,000 4,110,000 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 2024 2025 2026 2,511,000 3,645,000 2,138,400 5,589,000 1,944,000 $ Cost incurred during the year Estimated costs to complete as of year-end $ Assume that Westgate Construction's contract with Santa Clara County does not qualify for revenue recognition over time. Cost incurred during the year Estimated costs to complete as of year-end 2,100,000 4,056,000 3,844,000 1,900,000 3,700,000 4,400,000 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). 0 2-b. In the journal below, complete the necessary journal entries for the year 2025 (credit "Cash, Materials, etc." for construction costs incurred). 2-c. In the journal below, complete the necessary journal entries for the year 2026 (credit "Cash, Materials, etc." for construction costs incurred). 3. Complete the information required below to prepare a partial balance sheet for 2024 and 2025 showing any items related to the contract. 4. 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. 2024 2025 2026 $ 2,410,000 3,885,000 3,210,000 5,610,000 3,110,000 $ 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. 2025 2026 $ $ 2024 2,410,000 3,805,000 3,915,000 5,610,000 4,110,000

Answer rating: 100% (QA)

Calculation of revenue and gross profit loss to be recognized in each of the three years Year 2024 Revenue to be recognized 0 no billings during the year Gross profit loss 2511000 0 2511000 Year 2025 ... View the full answer