I can find the revenue but am struggling with understanding how to find the gross profit or loss. Is this because estimated costs to complete are more than the contract of $10,000,000? ### Required Information[The following information applies to the questions displayed below.]In 2021, 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 2023. Information related to the contract is as follows:| | 2021 | 2022 | 2023 ||----------------------------------|-------------|-------------|-------------|| **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 | $0 || **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 the percentage of completion.### Problem StatementCalculate 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.**Here is the data that you will use for your calculations:| | 2021 | 2022 | 2023 ||----------------------------------|-------------|-------------|-------------|| **Costs incurred during the year** | $2,184,000 | $3,860,000 | $4,080,000 || **Estimated costs to complete as of year-end** | $5,616,000 | $4,220,000 | $0 |This data will help you determine the percentage of completion for each year and consequently, the revenue and gross profit for the Westgate Construction Company over the span of the project. Please ensure accuracy in your calculations as this will be pivotal for effective financial reporting and project analysis.

POC % = cost incurred till date/ Total Estimated cost of completion. As per POC method, Revenue…

. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years assuming the following costs curred and costs to complete information. (Do not round intermediate calculations and round your final answers to the nearest hole dollar amount. Loss amounts should be indicated with a minus sign.) Costs incurred during the year 2021 $2.184.000 2022 $3.860.00A 2023 $4.980.000

. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years assuming the following costs curred and costs to complete information. (Do not round intermediate calculations and round your final answers to the nearest hole dollar amount. Loss amounts should be indicated with a minus sign.) Costs incurred during the year 2021 $2.184.000 2022 $3.860.00A 2023 $4.980.000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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