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: Cost incurred during the year $ 2,016,000 $ 2,808,000 $ 2,613,600 Estimated costs to complete as of year-end 5,184,000 2,376,000 0 Billings during the year 2,180,000 2,644,000 5,176,000 Cash collections during the year 1,890,000 2,500,000 5,610,000 Westgate recognizes revenue over time according to percentage of completion. 4. Compute 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. (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.) Cost incurred during the year $ 2,016,000 $ 3,890,000 $ 3,290,000 Estimated costs to complete as of year-end 5,184,000 3,190,000 5. Compute 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. (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.) cost incurred during the year $ 2,016,000 $ 3,890,000 $ 4,170,000 Estimated costs to complete as of year-end 5,184,000 4,280,000 0

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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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:

Cost incurred during the year	$	2,016,000	$	2,808,000	$	2,613,600
Estimated costs to complete as of year-end		5,184,000		2,376,000		0
Billings during the year		2,180,000		2,644,000		5,176,000
Cash collections during the year		1,890,000		2,500,000		5,610,000

Westgate recognizes revenue over time according to percentage of completion.

4. Compute 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. (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.)

Cost incurred during the year	$	2,016,000		$	3,890,000		$	3,290,000
Estimated costs to complete as of year-end		5,184,000			3,190,000

5. Compute 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. (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.)

cost incurred during the year	$	2,016,000		$	3,890,000		$	4,170,000
Estimated costs to complete as of year-end		5,184,000			4,280,000			0

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