Reference: Intermediate Accounting, 11th Edition by David Spiceland

Chapter 6

Please help me with these practice questions

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: 2024 2025 2026 Cost incurred during the year $ 2,184,000 $ 3,510,000 $ 2,316,600 Estimated costs to complete as of year-end 5,616,000 2,106,000 Billings during the year 2,120,000 3,574,000 4,306,000 Cash collections during the year 1,860,000 3,400,000 4,740,000 Westgate recognizes revenue over time according to percentage of completion. References Section Break Problem 6-10 (Algo) Long-term contract; revenue over time [LO6-8, 6-9] 2. Award: 2.50 points Problem 6-10 (Algo) Part 1 Required: 1. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years. Note: Do not round intermediate calculations. Loss amounts should be indicated with a minus sign. 2024 2025 2026 Revenue S 2,800,000 $ 4,500,000 $ 2,700,000 Gross profit (loss) 616,000 $ 990,000 References Worksheet Difficulty: 3 Hard Learning Objective: 06-09 Demonstrate revenue recognition for long-term contracts, both at a point in time when the contract is completed and over a period of time according to the percentage completed. Problem 6-10 (Algo) Learning Objective: 06-08 Part 1 Understand the disclosures required for revenue recognition, accounts receivable, contract assets, and contract liabilities.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: 2024 2025 2026 Cost incurred during the year $ 2,184,000 $ 3,510,000 $ 2,316,600 Estimated costs to complete as of year-end 5,616,000 2,106,000 Billings during the year 2,120,000 3,574,000 4,306,000 Cash collections during the year 1,860,000 3,400,000 4,740,000 Westgate recognizes revenue over time according to percentage of completion. References Section Break Problem 6-10 (Algo) Long-term contract; revenue recognition over time [LO6-8, 6-9] 4. Award: 2.50 points Problem 6-10 (Algo) Part 3 3. Complete the information required below to prepare a partial balance sheet for 2024 and 2025 showing any items related to the contract. Note: Do not round intermediate calculations. Balance Sheet (Partial) 2024 2025 Current assets: Accounts receivable Construction in progress Less: Billings CIP in excess of billings 0 Current liabilities 0 0 References Worksheet Difficulty: 3 Hard Learning Objective: 06-09 Demonstrate revenue recognition for long-term contracts, both at a point in time when the contract is completed and over a period of time according to the percentage completed. Problem 6-10 (Algo) Learning Objective: 06-08 Part 3 Understand the disclosures required for revenue recognition, accounts receivable, contract assets, and contract liabilities.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: 2024 2025 2026 Cost incurred during the year $ 2,184,000 $ 3,510,000 $ 2,316,600 Estimated costs to complete as of year-end 5,616,000 2,106,000 Billings during the year 2,120,000 3,574,000 4,306,000 Cash collections during the year 1,860,000 3,400,000 4,740,000 Westgate recognizes revenue over time according to percentage of completion. References Section Break Problem 6-10 (Algo) Long-term contract; revenue recognition over time [LO6-8, 6-9] 3. Award: 2.50 points Problem 6-10 (Algo) Part 2 2-a. In the journal below, complete the necessary journal entries for the year 2024 (credit "Cash, Materials, etc." for construction costs incurred). 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). Complete this question by entering your answers in the tabs below. Req 2A Req 2B Req 2C In the journal below, complete the necessary journal entries for the year 2024 (credit "Cash, Materials, etc." for construction costs incurred). Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Show less View transaction list View journal entry worksheet x No Date General Journal Debit Credit 2024 Construction in progress 2,184,000 Cash, materials, etc. 2,184,000 2 2024 Accounts receivable 2,120,000 Billings on construction contract 2,120,000 3 2024 Cash 1,860,000 Accounts receivable 1,860,000 2024 Construction in progress Cost of construction Revenue from long-term contracts