n 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 $ 3,219,000 5,481,000 2,700,000 2,500,000 2025 $ 3,915,000 1,566,000 4,434,000 4,300,000 2026 $ 1,722,600 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. 0 2,866,000 3,200,000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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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
$ 3,219,000
5,481,000
2,700,000
2,500,000
2025
$ 3,915,000
1,566,000
4,434,000
4,300,000
2026
$ 1,722,600
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.
0
2,866,000
3,200,000
Required:
1. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years.
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 $ 3,219,000 5,481,000 2,700,000 2,500,000 2025 $ 3,915,000 1,566,000 4,434,000 4,300,000 2026 $ 1,722,600 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. 0 2,866,000 3,200,000 Required: 1. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years.
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