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FINANCIAL ACCOUNTING
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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Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years using the above information. (Leave no cells blank - be certain to enter "0" wherever required. Loss amounts should be indicated with a minus sign.) A table is displayed below with rows and columns organized as follows: | | 2021 | 2022 | 2023 | |------------|------|------|------| | Revenue | $ | $ 0 | $ | | Gross profit (loss) | $ 0 | $ | $ | The table includes cells that need to be filled in for the years 2021, 2022, and 2023 with revenue and gross profit (loss) amounts. Ensure no cell is left blank and use "0" where necessary. Indicate loss amounts with a minus sign. Below the table, two buttons are present: - [< Req 4] - [Req 5 >]
Transcribed Image Text:Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years using the above information. (Leave no cells blank - be certain to enter "0" wherever required. Loss amounts should be indicated with a minus sign.) A table is displayed below with rows and columns organized as follows: | | 2021 | 2022 | 2023 | |------------|------|------|------| | Revenue | $ | $ 0 | $ | | Gross profit (loss) | $ 0 | $ | $ | The table includes cells that need to be filled in for the years 2021, 2022, and 2023 with revenue and gross profit (loss) amounts. Ensure no cell is left blank and use "0" where necessary. Indicate loss amounts with a minus sign. Below the table, two buttons are present: - [< Req 4] - [Req 5 >]
### Educational Content for Westgate Construction Contract Analysis #### Financial Data Overview The financial data for Westgate Construction over the years 2021 to 2023 includes costs, billings, and cash collections associated with a contract with Santa Clara County. This contract does not qualify for revenue recognition over time. #### Yearly Financial Figures: - **2021** - Cost incurred during the year: $2,184,000 - Estimated costs to complete as of year-end: $5,616,000 - Billings during the year: $1,800,000 - Cash collections during the year: $1,600,000 - **2022** - Cost incurred during the year: $3,510,000 - Estimated costs to complete as of year-end: $2,106,000 - Billings during the year: $3,894,000 - Cash collections during the year: $3,400,000 - **2023** - Cost incurred during the year: $2,316,600 - Estimated costs to complete as of year-end: 0 - Billings during the year: $4,306,000 - Cash collections during the year: $5,000,000 #### Required Calculations and Tasks: 1. **Revenue and Gross Profit (Loss) Recognition:** - Calculate for each year (2021–2023). 2. **Journal Entries:** - 2-a. 2021: Credit "Various accounts" for construction costs incurred. - 2-b. 2022: Credit "Various accounts" for construction costs incurred. - 2-c. 2023: Credit "Various accounts" for construction costs incurred. 3. **Partial Balance Sheet Preparation:** - For 2021 and 2022, show any items related to the contract. 4. **Alternate Cost Estimation and Recognition:** - Using different cost estimates for 2021–2023, recalculate revenue and gross profit (loss). #### Alternate Cost Data: - **Scenario 1:** - 2021 - Cost incurred: $2,520,000 - Estimated costs to complete: $5,720,000 - 2022 - Cost incurred: $3,860,000 - Estimated costs to complete: $3
Transcribed Image Text:### Educational Content for Westgate Construction Contract Analysis #### Financial Data Overview The financial data for Westgate Construction over the years 2021 to 2023 includes costs, billings, and cash collections associated with a contract with Santa Clara County. This contract does not qualify for revenue recognition over time. #### Yearly Financial Figures: - **2021** - Cost incurred during the year: $2,184,000 - Estimated costs to complete as of year-end: $5,616,000 - Billings during the year: $1,800,000 - Cash collections during the year: $1,600,000 - **2022** - Cost incurred during the year: $3,510,000 - Estimated costs to complete as of year-end: $2,106,000 - Billings during the year: $3,894,000 - Cash collections during the year: $3,400,000 - **2023** - Cost incurred during the year: $2,316,600 - Estimated costs to complete as of year-end: 0 - Billings during the year: $4,306,000 - Cash collections during the year: $5,000,000 #### Required Calculations and Tasks: 1. **Revenue and Gross Profit (Loss) Recognition:** - Calculate for each year (2021–2023). 2. **Journal Entries:** - 2-a. 2021: Credit "Various accounts" for construction costs incurred. - 2-b. 2022: Credit "Various accounts" for construction costs incurred. - 2-c. 2023: Credit "Various accounts" for construction costs incurred. 3. **Partial Balance Sheet Preparation:** - For 2021 and 2022, show any items related to the contract. 4. **Alternate Cost Estimation and Recognition:** - Using different cost estimates for 2021–2023, recalculate revenue and gross profit (loss). #### Alternate Cost Data: - **Scenario 1:** - 2021 - Cost incurred: $2,520,000 - Estimated costs to complete: $5,720,000 - 2022 - Cost incurred: $3,860,000 - Estimated costs to complete: $3
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