Problem 6-11 (Algo) Long-term contract; revenue recognition upon completion [LO6-9] 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 $ 2,184,000 5,616,000 1,800,000 1,600,000 2025 $ 3,510,000 2,106,000 3,894,000 3,400,000 2026 $ 2,316,600 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. 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 0 4,306,000 5,000,000
Problem 6-11 (Algo) Long-term contract; revenue recognition upon completion [LO6-9] 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 $ 2,184,000 5,616,000 1,800,000 1,600,000 2025 $ 3,510,000 2,106,000 3,894,000 3,400,000 2026 $ 2,316,600 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. 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 0 4,306,000 5,000,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
3
![Problem 6-11 (Algo) Long-term contract; revenue recognition upon completion [LO6-9]
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:
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
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.
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.
Cost incurred during the year
Estimated costs to complete as of year-end
Req 1
Req 2A
Revenue
Gross profit (loss)
Complete this question by entering your answers in the tabs below.
Req 2B
2024
2024
$ 2,184,000
5,616,000
1,800,000
1,600,000
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.
Req 2C
2025
2024
$ 2,520,000
5,720,000
< Req 1
2026
2024
$ 2,520,000
5,720,000
2025
$ 3,860,000
3,220,000
Req 3
2025
$ 3,510,000
2,106,000
3,894,000
3,400,000
2025
$ 3,860,000
4,220,000
Req 4
2026
$ 2,316,600
Req 2A >
2026
$ 3,220,000
4,306,000
5,000,000
Req 5
Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years.
Note: Leave no cells blank - be certain to enter "0" wherever required. Loss amounts should be indicated with a minus sign.
0
2026
$ 4,080,000
0
0](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ffb94c028-391d-4039-8469-52697921dc9c%2Fbdad1db9-a656-4f0e-8f86-3a0c47eac5db%2Fciqo42_processed.png&w=3840&q=75)
Transcribed Image Text:Problem 6-11 (Algo) Long-term contract; revenue recognition upon completion [LO6-9]
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:
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
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.
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.
Cost incurred during the year
Estimated costs to complete as of year-end
Req 1
Req 2A
Revenue
Gross profit (loss)
Complete this question by entering your answers in the tabs below.
Req 2B
2024
2024
$ 2,184,000
5,616,000
1,800,000
1,600,000
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.
Req 2C
2025
2024
$ 2,520,000
5,720,000
< Req 1
2026
2024
$ 2,520,000
5,720,000
2025
$ 3,860,000
3,220,000
Req 3
2025
$ 3,510,000
2,106,000
3,894,000
3,400,000
2025
$ 3,860,000
4,220,000
Req 4
2026
$ 2,316,600
Req 2A >
2026
$ 3,220,000
4,306,000
5,000,000
Req 5
Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years.
Note: Leave no cells blank - be certain to enter "0" wherever required. Loss amounts should be indicated with a minus sign.
0
2026
$ 4,080,000
0
0
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 5 steps with 1 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education