In 2024, the Westgate Construction Company entered into a contract to construct a road for Santa Clara County for $10,000,000. Th 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. e 2,350,000 2,600,000 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. Th 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. e 2,350,000 2,600,000 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 Skip to question [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 2025 2026 Cost incurred during the year $ 2,059, 000 $ 2,627,000 $ 2,655,400 Estimated costs to complete as of year - end 5, 041, 000 2,414, 000 0 Billings during the year 2, 190, 000 2, 496,000 5, 314,000 Cash collections during the year 1,895,000 2,400,000 5, 705, 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 2024 (credit "Cash, Materials, etc." for construction costs incurred). 2- b. In the journal below, complete the necessary journal entries for the year 2025 (credit "Cash, Materials, etc." for construction costs incurred). 2- c. In the journal…
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On January 1, 2024, the Mason Manufacturing Company began construction of a building to be used as its office headquarters. The building was completed on September 30, 2025. Expenditures on the project were as follows: January 1, 2024 March 1, 2024 June 30, 2024 October 1, 2024 January 31, 2025 April 30, 2025 August 31, 2025 $1,000,000 600,000 800,000 600,000 270,000 585,000 900,000 On January 1, 2024, the company obtained a $3 million construction loan with a 10% interest rate. The loan was outstanding all of 2024 and 2025. The company's other interest-bearing debt included two long-term notes of $4,000,000 and $6,000,000 with interest rates of 6% and 8%, respectively. Both notes were outstanding during all of 2024 and 2025. Interest is paid annually on all debt. The company's fiscal year-end is December 31. 4. Compute the cost to be allocated to the building in 2025 other than Capitalized Interest, Show your computation in the workpaper provided. 4. 1/31/2025 4/30/2025 8/31/2025…
5) 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. 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. (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…
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Required information Skip to question [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 2025 2026 Cost incurred during the year $ 2,016,000 $2,808,000 $2,613,600 Estimated costs to complete as of year-end 5, 184,000 2,376, 000 0 Billings during the year 2, 180,000 2,644,000 5, 176,000 Cash collections during the year 1,890,000 2,500,000 5,610,000 Westgate recognizes revenue over time according to percentage of completion. 2-a. In the journal below, complete the necessary journal entries for the year 2024 (credit "Cash, Materials, etc." for construction costs incurred). 2-b. In the journal below, complete the necessary journal entries for the year 2025 (credit "Cash, Materials, etc." for construction costs incurred). 2-c. In the journal below, complete the…
On January 1, 2024, the Mason Manufacturing Company began construction of a building to be used as its office headquarters. The building was completed on September 30, 2025. Expenditures on the project were as follows: January 1, 2024 March 1, 2024 June 30, 2024 October 1, 2024 January 31, 2025 April 30, 2025 August 31, 2025 On January 1, 2024, the company obtained a $3,900,000 construction loan with a 12% interest rate. The loan was outstanding all of 2024 and 2025. The company's other interest-bearing debt included two long-term notes of $6,000,000 and $9,000,000 with interest rates of 8% and 10%, respectively. Both notes were outstanding during all of 2024 and 2025. Interest is paid annually on all debt. The company's fiscal year-end is December 31. Required: 1. Calculate the amount of interest that Mason should capitalize in 2024 and 2025 using the specific interest method. 2. What is the total cost of the building? 3. Calculate the amount of interest expense that will appear in…
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