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 2024 $ 2,590,000 5,790,000 Cost incurred during the year Estimated costs to complete as of year-end 2025 $ 3,895,000 3,290,000 2024 $ 2,590,000 5,790,000 2026 $ 3,290,000 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. 0 2025 2026 $ 3,895,000 $ 4,185,000 4,290,000 0
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 2024 $ 2,590,000 5,790,000 Cost incurred during the year Estimated costs to complete as of year-end 2025 $ 3,895,000 3,290,000 2024 $ 2,590,000 5,790,000 2026 $ 3,290,000 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. 0 2025 2026 $ 3,895,000 $ 4,185,000 4,290,000 0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text: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).
Cost incurred during the year.
Estimated costs to complete as of year-end
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.
Req 1
Req 2A
Revenue
Gross profit (loss)
Req 2B
2024
$ 1,491,000
5,609,000
1,100,000
900,000
Complete this question by entering your answers in the tabs below.
Req 2C
2025
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.
2024
$ 2,590,000
5,790,000
< Req 1
2026
2024
$ 2,590,000
5,790,000
2025
$ 3,195,000
2,414,000
3,586,000
2,700,000
2025
$ 3,895,000
3,290,000
Req 3
2025
$ 3,895,000
4,290,000
Req 4
2026
$ 2,655,400
Req 2A >
5,314,000
6,400,000
2026
$ 3,290,000
Req 5
0
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.
2024
0
2026
$ 4,185,000
0
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Step 1: Explain construction costing
VIEWStep 2: Calculate gross profit and revenue to be recognized
VIEWStep 3: Prepare journal entries
VIEWStep 4: Prepare partial balance sheet
VIEWStep 5: Calculate gross profit and revenue to be recognized
VIEWStep 6: Calculate gross profit and revenue to be recognized
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