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 Billings during the year 2024 $ 2,156,000 5,544,000 2,130,000 2025 2026 $ 3,388,000 $ 2,371,600 2,156,000 3,414,000 Ө Cash collections during the year 1,865,000 3,300,000 4,456,000 4,835,000 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. Note: 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. Costs incurred during the year 2024 2025 2026 $ 2,156,000 5,544,000 $ 3,865,000 4,230,000 $ 4,095,000 Ө Estimated costs to complete as of year-end > Answer is complete but not entirely correct. 2024 2025 Revenue $ 2,800,000 $ 7,200,000 2026 $10,000,000 × Gross profit (loss) $ 644,000 $ 1,656,000 $ 2,084,400 x
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 Billings during the year 2024 $ 2,156,000 5,544,000 2,130,000 2025 2026 $ 3,388,000 $ 2,371,600 2,156,000 3,414,000 Ө Cash collections during the year 1,865,000 3,300,000 4,456,000 4,835,000 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. Note: 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. Costs incurred during the year 2024 2025 2026 $ 2,156,000 5,544,000 $ 3,865,000 4,230,000 $ 4,095,000 Ө Estimated costs to complete as of year-end > Answer is complete but not entirely correct. 2024 2025 Revenue $ 2,800,000 $ 7,200,000 2026 $10,000,000 × Gross profit (loss) $ 644,000 $ 1,656,000 $ 2,084,400 x
Chapter3: Income Sources
Section: Chapter Questions
Problem 88P
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Question
Transcribed Image Text: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
Billings during the year
2024
$ 2,156,000
5,544,000
2,130,000
2025
2026
$ 3,388,000
$ 2,371,600
2,156,000
3,414,000
Ө
Cash collections during the year
1,865,000
3,300,000
4,456,000
4,835,000
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.
Note: 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.
Costs incurred during the year
2024
2025
2026
$ 2,156,000
5,544,000
$ 3,865,000
4,230,000
$ 4,095,000
Ө
Estimated costs to complete as of year-end
> Answer is complete but not entirely correct.
2024
2025
Revenue
$
2,800,000
$
7,200,000
2026
$10,000,000 ×
Gross profit (loss)
$
644,000
$
1,656,000
$ 2,084,400 x
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