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:| | 2021 | 2022 | 2023 ||----------------------------------------|-----------|-----------|-----------|| **Cost incurred during the year** | $2,044,000| $2,628,000| $2,890,800|| **Estimated costs to complete as of year-end** | $5,256,000| $2,628,000| $0 || **Billings during the year** | $2,170,000| $2,502,000| $5,328,000|| **Cash collections during the year** | $1,885,000| $2,600,000| $5,515,000|Westgate recognizes revenue over time according to the percentage of completion.**Required:**1. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years. - *Do not round intermediate calculations. Loss amounts should be indicated with a minus sign.*| | 2021 | 2022 | 2023 ||----------|-------|-------|-------|| **Revenue** | | | || **Gross profit (loss)** | | | |

Solution: Particulars Year 2021 ($) Year 2022 ($) Year 2023 ($) Revenue 28,00,000 36,00,000…

Answered: Required: 1. Calculate the amount of…

Required: 1. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years. calculations. Loss amounts should be indicated with a minus sign.)

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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Concept explainers

Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue authority, it is an accounting entry. It exists because of the difference between accounting profits and taxable profits.

Question

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:

| | 2021 | 2022 | 2023 |
|----------------------------------------|-----------|-----------|-----------|
| **Cost incurred during the year** | $2,044,000| $2,628,000| $2,890,800|
| **Estimated costs to complete as of year-end** | $5,256,000| $2,628,000| $0 |
| **Billings during the year** | $2,170,000| $2,502,000| $5,328,000|
| **Cash collections during the year** | $1,885,000| $2,600,000| $5,515,000|

Westgate recognizes revenue over time according to the percentage of completion.

**Required:**

1. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years.
- *Do not round intermediate calculations. Loss amounts should be indicated with a minus sign.*

| | 2021 | 2022 | 2023 |
|----------|-------|-------|-------|
| **Revenue** | | | |
| **Gross profit (loss)** | | | |

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