In 2018, the Westgate Construction Company entered into a contract to construct a road for Santa Clara

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In 2018, 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 2020. Information related to the contract is as follows:

In 2018, the Westgate Construction Company entered into a contract

Westgate recognizes revenue over time according to percentage of completion.
Required:
1. Calculate the amount of revenue and 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 2018 and 2019 showing any items related to the contract. Indicate whether any of the amounts shown are contract assets or contract liabilities.
4. Calculate the amount of revenue and gross profit to be recognized in each of the three years assuming the following costs incurred and costs to complete information:

In 2018, the Westgate Construction Company entered into a contract

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

In 2018, the Westgate Construction Company entered into a contract
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...
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Related Book For  book-img-for-question

Intermediate Accounting

ISBN: 9781259722660

9th Edition

Authors: J. David Spiceland, James Sepe, Mark Nelson, Wayne Thomas

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