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 2025 2026 Cost incurred during the year $ 2,100,000 $ 3,150,000 $ 2,475,000 Estimated costs to complete as of year-end 5,400,000 2,250,000 0 Billings during the year 2,150,000 3,100,000 4,750,000 Cash collections during the year 1,875,000 3,100,000 5,025,000 Westgate recognizes revenue over time according to percentage of completion. 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 2025 2026 Cost incurred during the year $ 2,100,000 $ 3,150,000 $ 2,475,000 Estimated costs to complete as of year-end 5,400,000 2,250,000 0 Billings during the year 2,150,000 3,100,000 4,750,000 Cash collections during the year 1,875,000 3,100,000 5,025,000 Westgate recognizes revenue over time according to percentage of completion. 1. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years.
Chapter3: Income Sources
Section: Chapter Questions
Problem 88P
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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. The road was completed in 2026. Information related to the contract is as follows:
2024 | 2025 | 2026 | |
---|---|---|---|
Cost incurred during the year | $ 2,100,000 | $ 3,150,000 | $ 2,475,000 |
Estimated costs to complete as of year-end | 5,400,000 | 2,250,000 | 0 |
Billings during the year | 2,150,000 | 3,100,000 | 4,750,000 |
Cash collections during the year | 1,875,000 | 3,100,000 | 5,025,000 |
Westgate recognizes revenue over time according to percentage of completion.
1. Calculate the amount of revenue and gross
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