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 $ 2,184,000 $3,510,000 $2,316, 600 Estimated costs to complete as of year-end 5,616,000 2,106, 000 0 Billings during the year 1,800,000 3,894,000 4,306, 000 Cash collections during the year 1,600,000 3,400,000 5,000,000 Assume that Westgate Construction's contract with Santa Clara County does not qualify for revenue recognition over time. Required: 1. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years. 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 necessary journal entries for the year 2026 (credit "Cash, Materials, etc." for construction costs incurred). 3. Complete the information required below to prepare a partial balance sheet for 2024 and 2025 showing any items related to the contract. 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 2025 2026 Cost incurred during the year $ 2,520,000 $3,860,000 $3,220, 000 Estimated costs to complete as of year-end 5, 720,000 3,220,000 0 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. 2024 2025 2026 Cost incurred during the year $ 2,520,000 $3,860,000 $ 4,080,000 Estimated costs to complete as of year-end 5, 720,000 4,220,000 0
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 $ 2,184,000 $3,510,000 $2,316, 600 Estimated costs to complete as of year-end 5,616,000 2,106, 000 0 Billings during the year 1,800,000 3,894,000 4,306, 000 Cash collections during the year 1,600,000 3,400,000 5,000,000 Assume that Westgate Construction's contract with Santa Clara County does not qualify for revenue recognition over time. Required: 1. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years. 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 necessary journal entries for the year 2026 (credit "Cash, Materials, etc." for construction costs incurred). 3. Complete the information required below to prepare a partial balance sheet for 2024 and 2025 showing any items related to the contract. 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 2025 2026 Cost incurred during the year $ 2,520,000 $3,860,000 $3,220, 000 Estimated costs to complete as of year-end 5, 720,000 3,220,000 0 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. 2024 2025 2026 Cost incurred during the year $ 2,520,000 $3,860,000 $ 4,080,000 Estimated costs to complete as of year-end 5, 720,000 4,220,000 0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
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: 2024 2025 2026 Cost
incurred during the year $ 2,184,000 $3,510,000 $2,316, 600 Estimated costs to complete as of year-end
5,616,000 2,106, 000 0 Billings during the year 1,800,000 3,894,000 4,306, 000 Cash collections during the year
1,600,000 3,400,000 5,000,000 Assume that Westgate Construction's contract with Santa Clara County does not qualify
for revenue recognition over time. Required: 1. Calculate the amount of revenue and gross profit (loss) to be recognized
in each of the three years. 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
necessary journal entries for the year 2026 (credit "Cash, Materials, etc." for construction costs incurred). 3. Complete
the information required below to prepare a partial balance sheet for 2024 and 2025 showing any items related to the
contract. 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 2025 2026 Cost incurred during the year
$ 2,520,000 $3,860,000 $3,220, 000 Estimated costs to complete as of year-end 5, 720,000 3,220,000 0 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. 2024 2025 2026 Cost incurred during the year $ 2,520,000 $3,860,000 $
4,080,000 Estimated costs to complete as of year-end 5, 720,000 4,220,000 0
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