5. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years, assuming the followin incurred and costs to complete information.
5. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years, assuming the followin incurred and costs to complete information.
Chapter3: Income Sources
Section: Chapter Questions
Problem 88P
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![[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:
Cost incurred during the year
Estimated costs to complete as of year-end
Billings during the year
Cash collections during the year
Westgate recognizes revenue over time according to percentage of completion.
Costs incurred during the year
Estimated costs to complete as of year-end
2024
$ 2,204,000
5,396,000
Revenue
Gross profit (loss)
2024
2025
2,140,000
1,870,000
5. Calculate the amount of revenue and gross.profit (loss) to be recognized in each of the three years, assuming the followin
incurred and costs to complete information.
2025
$ 3,192,000
2,204,000
3,256,000
3,200,000
Note: Do not round intermediate calculations and round your final answers to the nearest whole dollar amount. Loss am
should be indicated with a minus sign.
2024
$ 2,204,000
5,396,000
2026
2026
$ 2,424,400
0
2025
$ 3,870,000
4,240,000
4,604,000
4,930,000
2026
$ 4,110,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F38c4de76-dbc4-44e2-a15a-5e4c3ca49481%2Fa0eefba4-c150-41b8-9dfc-3b5208b226ef%2Fjt7cum_processed.jpeg&w=3840&q=75)
Transcribed Image Text:[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:
Cost incurred during the year
Estimated costs to complete as of year-end
Billings during the year
Cash collections during the year
Westgate recognizes revenue over time according to percentage of completion.
Costs incurred during the year
Estimated costs to complete as of year-end
2024
$ 2,204,000
5,396,000
Revenue
Gross profit (loss)
2024
2025
2,140,000
1,870,000
5. Calculate the amount of revenue and gross.profit (loss) to be recognized in each of the three years, assuming the followin
incurred and costs to complete information.
2025
$ 3,192,000
2,204,000
3,256,000
3,200,000
Note: Do not round intermediate calculations and round your final answers to the nearest whole dollar amount. Loss am
should be indicated with a minus sign.
2024
$ 2,204,000
5,396,000
2026
2026
$ 2,424,400
0
2025
$ 3,870,000
4,240,000
4,604,000
4,930,000
2026
$ 4,110,000
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