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 $10,000,000. Theroad was completed in 2026. Information related to the contract is as follows:Cost incurred during the yearEstimated costs to complete as of year-endCost incurred during the yearEstimated costs to complete as of year-endBillings during the yearCash collections during the yearAssume that Westgate Construction's contract with Santa Clara County does not qualify for revenue recognition over time.Required:1. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years.2-a. In the journal below, complete the necessary journal entries for the year 2024 (credit "Cash, Materials, etc." for construction costsincurred).Cost incurred during the yearEstimated costs to complete as of year-end2-b. In the journal below, complete the necessary journal entries for the year 2025 (credit "Cash, Materials, etc." for construction costsincurred).2-c. In the journal below, complete the necessary journal entries for the year 2026 (credit "Cash, Materials, etc." for construction costsincurred).3. Complete the information required below to prepare a partial balance sheet for 2024 and 2025 showing any items related to thecontract.4. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years, assuming the following costsincurred and costs to complete information.Req 1RevenueGross profit (loss)Req 1Complete this question by entering your answers in the tabs below.Req 2A5. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years, assuming the following costsincurred and costs to complete information.RevenueGross profit (loss)Req 2A2024Req 2B20242025Req 2B2024$ 3,600,0005,400,0003,000,0002,800,000Req 2C2025202620242025$ 2,500,000 $ 3,850,0005,700,0003,200,000Req 2C2024$ 2,500,0005,700,0002025$ 4,050,0001,350,0004,650,0004,600,000Req 3Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years using theabove information.Note: Leave no cells blank - be certain to enter "0" wherever required. Loss amounts should be indicatedwith a minus sign.20262025$ 3,850,0004,200,000Req 3Req 42026$ 1,485,000Req 42026$3,300,0002,350,0002,600,000Req 502026$ 4,050,000Req 500Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years using theabove information.Note: Leave no cells blank - be certain to enter "0" wherever required. Loss amounts should be indicatedwith a minus sign.Show less AShow less A

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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

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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