### Westgate Construction Company Contract Overview (2024-2026)In 2024, the Westgate Construction Company entered into a contract to construct a road for Santa Clara County, valued at $10,000,000. The road was completed in 2026. Below is the information related to the contract:#### Financial Data- **2024** - **Cost incurred during the year**: $3,096,000 - **Estimated costs to complete as of year-end**: $5,504,000 - **Billings during the year**: $2,600,000 - **Cash collections during the year**: $2,400,000- **2025** - **Cost incurred during the year**: $3,870,000 - **Estimated costs to complete as of year-end**: $1,634,000 - **Billings during the year**: $4,366,000 - **Cash collections during the year**: $4,200,000- **2026** - **Cost incurred during the year**: $1,797,400 - **Estimated costs to complete as of year-end**: $0 - **Billings during the year**: $3,034,000 - **Cash collections during the year**: $3,400,000#### Important NoteWestgate Construction’s contract with Santa Clara County does not qualify for revenue recognition over time.#### Required Analysis1. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years.

In the case of construction contracts revenue and gross profit are recognized on the basis of the…

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: 2024 $ 3,096,000 5,504,000 2,600,000 2,400,000 2025 $ 3,870,000 1,634,000 4,366,000 4,200,000 2026 $ 1,797,400 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. e 3,034,000 3,400,000 Required: 1. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years.

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: 2024 $ 3,096,000 5,504,000 2,600,000 2,400,000 2025 $ 3,870,000 1,634,000 4,366,000 4,200,000 2026 $ 1,797,400 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. e 3,034,000 3,400,000 Required: 1. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years.

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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Required information [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: 2024 Cost incurred during the year Estimated costs to complete as of year-end $ 2,400,000 5,600,000 2,000,000 Billings during the year Cash collections during the year 1,800,000 Westgate recognizes revenue over time according to percentage of completion. Balance Sheet (Partial) Current assets: Accounts receivable Construction in progress Add: Billings Current liabilities: Billings in excess of CIP 3. Complete the information required below to prepare a partial balance sheet for 2024 and 2025 showing any items related to the contract. Note: Do not round intermediate calculations. $ 2024 900,000 2,000,000 $4,285,714 (1,100,000) $ 2,070,000 0 2025 $ 3,600,000 2,000,000 4,000,000 3,600,000 2025…
! Required information [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: 2024 Cost incurred during the year $ 2,156,000 Estimated costs to complete as of year-end 5,544,000 Billings during the year 2,130,000 2025 $3,388,000 2,156,000 3,414,000 2026 $2,371,600 0 4,456,000 Cash collections during the year 1,865,000 3,300,000 4,835,000 Westgate recognizes revenue over time according to percentage of completion. Required: 1. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years. Note: Do not round intermediate calculations. Loss amounts should be indicated with a minus sign. Revenue Gross profit (loss) 2024 I.. 2025 2026
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6) 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 $ 2,100,000 $ 2,450,000 $ 2,695,000 Estimated costs to complete as of year-end 4,900,000 2,450,000 0 Billings during the year 2,200,000 2,350,000 5,450,000 Cash collections during the year 1,900,000 2,300,000 5,800,000 Westgate recognizes revenue over time according to percentage of completion. 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 2023 Costs incurred…
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 $ 2,100,000 $ 2,450,000 $ 2,695,000 Estimated costs to complete as of year-end 4,900,000 2,450,000 0 Billings during the year 2,200,000 2,350,000 5,450,000 Cash collections during the year 1,900,000 2,300,000 5,800,000 Westgate recognizes revenue over time according to percentage of completion. 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 for the year 2022 (credit "Various accounts" for construction costs incurred).2-c. In the journal below, complete the necessary journal entries for the year 2023…
In early 2024, Beertender Company entered into a long term contract to construct abridge for Notsosober County for $10 million. The bridge will take three years tocomplete. In 2024, Beertender spent $2.8 million on the project, recognized $3.5million in revenue and $0.7 million in profit. In 2025, Beertender spent $4.2 million onthe project, recognized $3.8 million in revenue and a $0.4 million loss. Beertenderbilled Notsosober $3.0 million in 2024 and $4.5 million in 2025. Notsosober paidBeertender $2.6 million in 2024 and $4.3 million in 2025. Beertender Companyrecognizes revenue on all contracts over time by using the cost to cost ratio. 1. When preparing its December 31, 2024 balance sheet, Beertender would report thefollowing with regards to this contract: Current Assets of $3.9 million, and Current Liabilities of $3.0 million. Current Assets of $6.5 million, and no Current Liabilities. Current Assets of $3.9 million, and no Current Liabilities. Current Assets of $0.9…
Required information [The following information applies to the questions displayed 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: Cost incurred during the year Estimated costs to complete as of year-end Billings during the year Cash collections during the year 2021 $2,100,000 2022 $3,150,000 2023 $2,475,000 5,400,000 2,150,000 2,250,000 3,100,000 8 1,875,000 3,100,000 4,750,000 5,025,000 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.) Balance Sheet (Partial) Current assets Current liabilities: 2021 2022 0 0
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