P6-10 Long-term ontract venue icognition ver time .LO6-8, 06-9 In 2024, the Westgate Construction Company entered into a contract to construct a road for Santa Clara County for $10,000,000 completed in 2026. Information related to the contract is as follows: 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. Required: 2024 $2,400,000 5,600,000 2.000.000 1,800,000 Cost incurred during the year Estimated costs to complete as of year-end Cost incurred during the year Estimated costs to complete as of year-end 2024 $2.400.000 5,600,000 2025 $3,600,000 2,000,000 4,000,000 3,600,000 1. Calculate the amount of revenue and gross profit to be recognized in each of the three years. 2. Prepare all necessary journal entries for each of the years (credit "Cash, Materials, etc. for construction costs incurred). 3. 4. Prepare a partial balance sheet for 2024 and 2025 showing any items related to the contract. Indicate whether any of the amounts shown are contract assets or contract liabilities. Calculate the amount of revenue and gross profit to be recognized in each of the three years, assuming the following costs incurred and costs to complete 2024 $2,400,000 5,600,000 2025 $3,800,000 3,100,000 TODU was 2026 $2,200,000 2025 $3,800,000 4,100,000 4,000,000 4,600,000 5. Calculate the amount of revenue and gross profit to be recognized in each of the three years, assuming the following costs incurred and costs to complete information: 2026 $3,200,000 2026 $3,900,000 This is a variation of P 6-10 modified to focus on revenue recognition upon project completion.] Required: Complete the requirements of P 6-10, assuming that Westgate Construction's contract with Santa Clara County does not qualify for revenu cognition over time.
P6-10 Long-term ontract venue icognition ver time .LO6-8, 06-9 In 2024, the Westgate Construction Company entered into a contract to construct a road for Santa Clara County for $10,000,000 completed in 2026. Information related to the contract is as follows: 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. Required: 2024 $2,400,000 5,600,000 2.000.000 1,800,000 Cost incurred during the year Estimated costs to complete as of year-end Cost incurred during the year Estimated costs to complete as of year-end 2024 $2.400.000 5,600,000 2025 $3,600,000 2,000,000 4,000,000 3,600,000 1. Calculate the amount of revenue and gross profit to be recognized in each of the three years. 2. Prepare all necessary journal entries for each of the years (credit "Cash, Materials, etc. for construction costs incurred). 3. 4. Prepare a partial balance sheet for 2024 and 2025 showing any items related to the contract. Indicate whether any of the amounts shown are contract assets or contract liabilities. Calculate the amount of revenue and gross profit to be recognized in each of the three years, assuming the following costs incurred and costs to complete 2024 $2,400,000 5,600,000 2025 $3,800,000 3,100,000 TODU was 2026 $2,200,000 2025 $3,800,000 4,100,000 4,000,000 4,600,000 5. Calculate the amount of revenue and gross profit to be recognized in each of the three years, assuming the following costs incurred and costs to complete information: 2026 $3,200,000 2026 $3,900,000 This is a variation of P 6-10 modified to focus on revenue recognition upon project completion.] Required: Complete the requirements of P 6-10, assuming that Westgate Construction's contract with Santa Clara County does not qualify for revenu cognition over time.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:P 6-10
Long-term
ontract;
venue
cognition
ver time
.LO6-8,
06-9
In 2024, the Westgate Construction Company entered into a contract to construct a road for Santa Clara County for $10,000,000. The TODO was
completed in 2026. Information related to the contract is as follows:
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.
Required:
2024
$2,400,000
5,600,000
2,000,000
1,800,000
Cost incurred during the year
Estimated costs to complete as of year-end
1. Calculate the amount of revenue and gross profit to be recognized in each of the three years.
2. Prepare all necessary journal entries for each of the years (credit "Cash, Materials, etc. for construction costs incurred).
3. Prepare a partial balance sheet for 2024 and 2025 showing any items related to the contract. Indicate whether any of the amounts shown are
contract assets or contract liabilities.
Cost incurred during the year
Estimated costs to complete as of year-end
2025
$3,600,000
2,000,000
4,000,000
3,600,000
4. Calculate the amount of revenue and gross profit to be recognized in each of the three years, assuming the following costs incurred and costs
to complete information:
2024
$2,400,000
5,600,000
2024
$2,400,000
5,600,000
2026
$2,200,000
2025
$3,800,000
3,100,000
4,000,000
4,600,000
5. Calculate the amount of revenue and gross profit to be recognized in each of the three years, assuming the following costs incurred and costs
to complete information:
2025
$3,800,000
4,100,000
2026
$3,200,000
2026
$3,900,000
This is a variation of P 6-10 modified to focus on revenue recognition upon project completion.
Required:
Complete the requirements of P 6-10, assuming that Westgate Construction's contract with Santa Clara County does not qualify for revenu
ecognition over time.
page 329
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