In 2024, the Westgate Construction Company entered into a contract to construct a road for Santa Clara County for $10,000,000 road was completed in 2026. Information related to the contract is as follows: 2024 $ 3,600,000 5,400,000 3,000,000 2,800,000 2025 $ 4,050,000 1,350,000 4,650,000 4,600,000 2026 $ 1,485,000 Cost incurred during the year Estimated costs to complete as of year-end Billings during the year Cash collections during the year Assume that Westgate Construction's contract with Santa Clara County does not qualify for revenue recognition over time. 0 2,350,000 2,600,000
In 2024, the Westgate Construction Company entered into a contract to construct a road for Santa Clara County for $10,000,000 road was completed in 2026. Information related to the contract is as follows: 2024 $ 3,600,000 5,400,000 3,000,000 2,800,000 2025 $ 4,050,000 1,350,000 4,650,000 4,600,000 2026 $ 1,485,000 Cost incurred during the year Estimated costs to complete as of year-end Billings during the year Cash collections during the year Assume that Westgate Construction's contract with Santa Clara County does not qualify for revenue recognition over time. 0 2,350,000 2,600,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A4
![Problem 6-11 (Algo) Long-term contract; revenue recognition upon completion [LO6-9]
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
Cost incurred during the year
Estimated costs to complete as of year-end
Billings during the year
Cash collections during the year
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 2024 (credit "Cash, Materials, etc." for construction costs
incurred).
Cost incurred during the year
Estimated costs to complete as of year-
end
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).
3. Complete the information required below to prepare a partial balance sheet for 2024 and 2025 showing any items related to the
contract.
4. 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.
Req 1
Revenue
Gross profit (loss)
Req 1
Complete this question by entering your answers in the tabs below.
Req 2A
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.
Revenue
Gross profit (loss)
Req 2A
2024
Req 2B
2024
2025
Req 2B
2024
$ 3,600,000
5,400,000
3,000,000
2,800,000
Req 2C
2025
2026
2024
2025
$ 2,500,000 $ 3,850,000
5,700,000
3,200,000
Req 2C
2024
$ 2,500,000
5,700,000
2025
$ 4,050,000
1,350,000
4,650,000
4,600,000
Req 3
Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years using the
above information.
Note: Leave no cells blank - be certain to enter "0" wherever required. Loss amounts should be indicated
with a minus sign.
2026
2025
$ 3,850,000
4,200,000
Req 3
Req 4
2026
$ 1,485,000
Req 4
2026
$3,300,000
2,350,000
2,600,000
Req 5
0
2026
$ 4,050,000
Req 5
0
0
Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years using the
above information.
Note: Leave no cells blank - be certain to enter "0" wherever required. Loss amounts should be indicated
with a minus sign.
Show less A
Show less A](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd74dc1df-2713-4275-aaf6-805339976289%2F43fdbbc1-fd71-4fbc-89d3-1aa5f35af14a%2Fqyzqvjk_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Problem 6-11 (Algo) Long-term contract; revenue recognition upon completion [LO6-9]
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
Cost incurred during the year
Estimated costs to complete as of year-end
Billings during the year
Cash collections during the year
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 2024 (credit "Cash, Materials, etc." for construction costs
incurred).
Cost incurred during the year
Estimated costs to complete as of year-
end
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).
3. Complete the information required below to prepare a partial balance sheet for 2024 and 2025 showing any items related to the
contract.
4. 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.
Req 1
Revenue
Gross profit (loss)
Req 1
Complete this question by entering your answers in the tabs below.
Req 2A
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.
Revenue
Gross profit (loss)
Req 2A
2024
Req 2B
2024
2025
Req 2B
2024
$ 3,600,000
5,400,000
3,000,000
2,800,000
Req 2C
2025
2026
2024
2025
$ 2,500,000 $ 3,850,000
5,700,000
3,200,000
Req 2C
2024
$ 2,500,000
5,700,000
2025
$ 4,050,000
1,350,000
4,650,000
4,600,000
Req 3
Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years using the
above information.
Note: Leave no cells blank - be certain to enter "0" wherever required. Loss amounts should be indicated
with a minus sign.
2026
2025
$ 3,850,000
4,200,000
Req 3
Req 4
2026
$ 1,485,000
Req 4
2026
$3,300,000
2,350,000
2,600,000
Req 5
0
2026
$ 4,050,000
Req 5
0
0
Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years using the
above information.
Note: Leave no cells blank - be certain to enter "0" wherever required. Loss amounts should be indicated
with a minus sign.
Show less A
Show less A
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