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: 202120222023Cost incurred during the year$2,640,000 $2,300,000 $2,926,000 Estimated costs to complete as of year-end 6,160,000 2,660,000 0 Billings during the year 2,080,000 2,860,000 5,060,000 Cash collections during the year 1,840,000 2,800,000 5,360,000 Westgate recognizes revenue over time according to percentage of completion. 3. Complete the information required below to prepare a partial balance sheet for 2021 and 2022 showing any items related to the contract. (Do not round intermediate calculations.)

Contract costing: Contract costing is that form of specific order costing that applies where work is…

Answered: In 2021, the Westgate Construction…

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter3: Income Sources

Section: Chapter Questions

Problem 88P

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On March 1, 2019, Elkhart enters into a new contract to build a specialized warehouse for 7 million. The promise to transfer the warehouse is determined to be a performance obligation. The contract states that if the warehouse is usable by November 30, 2019, Elkhart will receive a bonus of 600,000. For every week after November 30 that the warehouse is not usable, the bonus will decrease by 150,000. Elkhart provides the following completion schedule: Required: 1. Assume that Elkhart uses the expected value approach. What amount should Elkhart use for the transaction price? 2. Assume that Elkhart uses the most likely amount approach. What amount should Elkhart use for the transaction price? 3. Next Level What is the purpose of assessing whether a constraint on the variable consideration exists?
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 $ 3,344,000 $ 3,960,000 $ 1,645,600 Estimated costs to complete as of year-end 5,456,000 1,496,000 0 Billings during the year 2,800,000 4,504,000 2,696,000 Cash collections during the year 2,600,000 4,400,000 3,000,000 Assume that Westgate Construction’s contract with Santa Clara County does not qualify for revenue recognition over time.Required:1. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years.2-a. In the journal below, complete the necessary journal entries for the year 2021 (credit "Various accounts" for construction costs incurred).2-b. In the journal below, complete the necessary journal entries…
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 $ 2,204,000 $ 3,192,000 $ 2,424,400 Estimated costs to complete as of year-end 5,396,000 2,204,000 0 Billings during the year 2,140,000 3,256,000 4,604,000 Cash collections during the year 1,870,000 3,200,000 4,930,000 Westgate recognizes revenue over time according to percentage of completion. Problem 6-10 (Algo) Part 5 5. Calculate 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.) 2021 2022…
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                                       $2,581,000              $2,347,000             $3,049,200 Estimated costs to complete as of year-end               6,319,000                2,772,000                              0 Billings during the year                                                    2,090,000                 2,838,000               5,072,000 Cash collections during the year                                    1,845,000                 2,900,000               5,255,000    Westgate recognizes revenue over time according to percentage of completion. 2.b. In the journal 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                                       $2,581,000              $2,347,000             $3,049,200 Estimated costs to complete as of year-end               6,319,000                2,772,000                              0 Billings during the year                                                    2,090,000                 2,838,000               5,072,000 Cash collections during the year                                    1,845,000                 2,900,000               5,255,000    Westgate recognizes revenue over time according to percentage of completion. 2-a. In the journal below, complete the…
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                                       $2,581,000              $2,347,000             $3,049,200 Estimated costs to complete as of year-end               6,319,000                2,772,000                              0 Billings during the year                                                    2,090,000                 2,838,000               5,072,000 Cash collections during the year                                    1,845,000                 2,900,000               5,255,000    Westgate recognizes revenue over time according to percentage of completion. 2.c. In the journal 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                                       $2,581,000              $2,347,000             $3,049,200 Estimated costs to complete as of year-end               6,319,000                2,772,000                              0 Billings during the year                                                    2,090,000                 2,838,000               5,072,000 Cash collections during the year                                    1,845,000                 2,900,000               5,255,000    Westgate recognizes revenue over time according to percentage of completion. 2-a. In the journal below, complete the…
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                                       $2,581,000              $2,347,000             $3,049,200 Estimated costs to complete as of year-end               6,319,000                2,772,000                              0 Billings during the year                                                    2,090,000                 2,838,000               5,072,000 Cash collections during the year                                    1,845,000                 2,900,000               5,255,000    Westgate recognizes revenue over time according to percentage of completion. 2.a. In the journal 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                                       $2,581,000              $2,347,000             $3,049,200 Estimated costs to complete as of year-end                6,319,000                 2,772,000                              0 Billings during the year                                                    2,090,000                 2,838,000               5,072,000 Cash collections during the year                                    1,845,000                 2,900,000               5,255,000 Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years assuming the…
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                                       $2,581,000              $2,347,000             $3,049,200 Estimated costs to complete as of year-end               6,319,000                2,772,000                              0 Billings during the year                                                    2,090,000                 2,838,000               5,072,000 Cash collections during the year                                    1,845,000                 2,900,000               5,255,000    Westgate recognizes revenue over time according to percentage of completion. Record cash collections.
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                                       $2,581,000              $2,347,000             $3,049,200 Estimated costs to complete as of year-end               6,319,000                2,772,000                              0 Billings during the year                                                    2,090,000                 2,838,000               5,072,000 Cash collections during the year                                    1,845,000                 2,900,000               5,255,000    Westgate recognizes revenue over time according to percentage of completion. 4.Calculate the amount of revenue and…
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                                       $2,581,000              $2,347,000             $3,049,200 Estimated costs to complete as of year-end               6,319,000                2,772,000                              0 Billings during the year                                                    2,090,000                 2,838,000               5,072,000 Cash collections during the year                                    1,845,000                 2,900,000               5,255,000    Westgate recognizes revenue over time according to percentage of completion. Required: 1.Calculate the amount of…

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	2021	2022	2023
Cost incurred during the year	$	2,640,000		$	2,300,000	$	2,926,000
Estimated costs to complete as of year-end		6,160,000			2,660,000		0
Billings during the year		2,080,000			2,860,000		5,060,000
Cash collections during the year		1,840,000			2,800,000		5,360,000