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: 2024 $ 2,490,000 5,810,000 2025 $ 3,984,000 1,826,000 4,444,000 3,900,000 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. 2,030,000 1,815,000 2026 $ 2,008,600 0 3,526,000 4,285,000

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: 2024 $ 2,490,000 5,810,000 2025 $ 3,984,000 1,826,000 4,444,000 3,900,000 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. 2,030,000 1,815,000 2026 $ 2,008,600 0 3,526,000 4,285,000

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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Exercise 7-27 (Algorithmic) (LO. 5) Sandstorm Corporation decides to develop a new line of paints. The project begins in 2023 in the U.S. Sandstorm incurs the following expenses in 2023 in connection with the project: Salaries Materials Depreciation on equipment The benefits from the project will be realized starting in July 2024. If an amount is zero, enter "0". Sandstorm Corporation capitalizes and amortizes its research and experimental expenditures. What are its related deductions in 2023 and 2024? 2023: $104,400 31,320 15,660 2024: 0 X 15,138 X
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BnD Construction Co. successfully tendered for a 3-year contract to erect some warehouse facilities in Gros Islet. The following information has been provided. Contract price - $25 000 000 2021 2022 2023 Cost during year $ 4 000 000 $8 000 000 $8 100 000 Estimated cost to complete 16 000 000 8 050 000 0 Progress billings to date 4 500 000 11 500 000 25 000 000 Cash collected to date 4 200 000 11 000 000 25 000 000 i. Complete the following Workings Schedule. Do not enter negative values in the schedule. 2021 2022 2023 Cost to date $Answer 29 Question 3 $Answer 30 Question 3 $Answer 31 Question 3 Estimated cost to complete $Answer 32 Question 3 $Answer 33 Question 3 $Answer 34 Question 3 Total estimated cost $Answer 35 Question 3 $Answer 36 Question 3 $Answer 37 Question 3 Percentage complete (Round to nearest whole number) Answer 38 Question 3% Answer 39 Question 3%…
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Problem 15-30 (Algo) Sale-leaseback [LO Appendix 15] To raise operating funds, North American Courier Corporation sold its building on January 1, 2024, to an insurance company for $508,000 and immediately leased the building back. • The lease is for a 10-year period ending December 31, 2033, at which time ownership of the building will revert to North American Courier. • The building has a carrying amount of $430,000 (original cost $1,060,000). • The lease requires North American to make payments of $89,908 to the insurance company each December 31. · 0 The building had a total original useful life of 30 years with no residual value and is being depreciated on a straight-line basis. The lease has an implicit rate of 12%. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Required: 1. Prepare the appropriate entries for North American (a) on January 1, 2024, to record the transaction and (b) on December 31, 2024, to…
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 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: 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) 2021 2022 $2,044,000 $2,628,000 5,256,000 2,628,000 2,170,000 2,502,000 1,885,000 2,600,000 Problem 6-10 (Algo) Part 5 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. (Do not round intermediate…
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Subject : Accounting