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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 $ 2,291,000 5,609,000 2,110,000 1,855,000 2025 $ 3,555,000 2,054,000 Cost incurred during the year Estimated costs to complete as of year-end Billings during the year Cash collections during the year Westgate recognizes revenue over time according to percentage of completion. 3,736,000 3,500,000 2026 $ 2,259,400 0 4,154,000 4,645,000

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 $ 2,291,000 5,609,000 2,110,000 1,855,000 2025 $ 3,555,000 2,054,000 Cost incurred during the year Estimated costs to complete as of year-end Billings during the year Cash collections during the year Westgate recognizes revenue over time according to percentage of completion. 3,736,000 3,500,000 2026 $ 2,259,400 0 4,154,000 4,645,000

FINANCIAL ACCOUNTING
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 Problem 6-10 (Algo) Long-term contract; revenue recognition over time [LO6-8, 6-9] [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: Problem 6-10 (Algo) Part 4 Cost incurred during the year Estimated costs to complete as of year-end Billings during the year Cash collections during the year Westgate recognizes revenue over time according to percentage of completion. Costs incurred during the year Estimated costs to complete as of year-end Revenue Gross profit (loss) $ 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. 2024 2024 $ 2,291,000 5,609,000 2,110,000 1,855,000 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. 2,900,000 2025 2025 $ 3,555,000 2,054,000 3,736,000 3,500,000 2026 2024 $ 2,291,000 5,609,000 2026 $ 2,259,400 2025 $ 3,855,000 3,155,000 4,154,000 4,645,000 0 2026 $ 3,255,000 0
Transcribed Image Text:Required information Problem 6-10 (Algo) Long-term contract; revenue recognition over time [LO6-8, 6-9] [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: Problem 6-10 (Algo) Part 4 Cost incurred during the year Estimated costs to complete as of year-end Billings during the year Cash collections during the year Westgate recognizes revenue over time according to percentage of completion. Costs incurred during the year Estimated costs to complete as of year-end Revenue Gross profit (loss) $ 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. 2024 2024 $ 2,291,000 5,609,000 2,110,000 1,855,000 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. 2,900,000 2025 2025 $ 3,555,000 2,054,000 3,736,000 3,500,000 2026 2024 $ 2,291,000 5,609,000 2026 $ 2,259,400 2025 $ 3,855,000 3,155,000 4,154,000 4,645,000 0 2026 $ 3,255,000 0
Required information Problem 6-10 (Algo) Long-term contract; revenue recognition over time [LO6-8, 6-9] [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: Problem 6-10 (Algo) Part 3 Cost incurred during the year Estimated costs to complete as of year-end Billings during the year Cash collections during the year Westgate recognizes revenue over time according to percentage of completion. Balance Sheet (Partial) Current assets: Accounts receivable Construction in progress Less: Billings Current liabilities: CIP in excess of billings 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. X Answer is not complete. 2024 $ 2,900,000 2,110,000 2024 $ 2,291,000 5,609,000 2,110,000 1,855,000 $ 255,000 790,000 0 2025 $ 3,555,000 2,054,000 3,736,000 3,500,000 2025 $ 7,400,000 1,626,000 $ 491,000 5,774,000 2026 $ 2,259,400 0 0 4,154,000 4,645,000
Transcribed Image Text:Required information Problem 6-10 (Algo) Long-term contract; revenue recognition over time [LO6-8, 6-9] [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: Problem 6-10 (Algo) Part 3 Cost incurred during the year Estimated costs to complete as of year-end Billings during the year Cash collections during the year Westgate recognizes revenue over time according to percentage of completion. Balance Sheet (Partial) Current assets: Accounts receivable Construction in progress Less: Billings Current liabilities: CIP in excess of billings 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. X Answer is not complete. 2024 $ 2,900,000 2,110,000 2024 $ 2,291,000 5,609,000 2,110,000 1,855,000 $ 255,000 790,000 0 2025 $ 3,555,000 2,054,000 3,736,000 3,500,000 2025 $ 7,400,000 1,626,000 $ 491,000 5,774,000 2026 $ 2,259,400 0 0 4,154,000 4,645,000
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