Question 2 In 2018, 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 2020. 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 2018 $2,400,000 5,600,000 2,000,000 1,800,000 2019 $3,600,000 2,000,000 4,000,000 3,600,000 2020 $2,200,000 -0- 4,000,000 4,600,000 Westgate recognizes revenue over time according to percentage of completion. Required: 1. Calculate the amount of revenue and gross profit to be recognized in each of the three years. 2. Make all necessary journal entries for 2018 3. Present all information regarding this contract in statement of financial position and income statement 2018.
Question 2 In 2018, 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 2020. 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 2018 $2,400,000 5,600,000 2,000,000 1,800,000 2019 $3,600,000 2,000,000 4,000,000 3,600,000 2020 $2,200,000 -0- 4,000,000 4,600,000 Westgate recognizes revenue over time according to percentage of completion. Required: 1. Calculate the amount of revenue and gross profit to be recognized in each of the three years. 2. Make all necessary journal entries for 2018 3. Present all information regarding this contract in statement of financial position and income statement 2018.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Question 2
In 2018, 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 2020. 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
2018
$2,400,000
5,600,000
2,000,000
1,800,000
2019
$3,600,000
2,000,000
4,000,000
3,600,000
2020
$2,200,000
-0-
4,000,000
4,600,000
Westgate recognizes revenue over time according to percentage of completion.
Required:
1. Calculate the amount of revenue and gross profit to be recognized in each of the three years.
2. Make all necessary journal entries for 2018
3. Present all information regarding this contract in statement of financial position and income statement 2018.
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