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 $ 2,640,000 $ 2,300,000 $ 2,926,000 Estimated costs to complete as of year-end 6,160,000 2,660,000 0 Billings during the year 2,080,000 2,860,000 5,060,000 Cash collections during the year 1,840,000 2,800,000 5,360,000 Westgate recognizes revenue over time according to percentage of completion. 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. (Do not round intermediate calculations and round your final answers to the nearest whole dollar amount. Loss amounts should be indicated with a minus sign.) 2021 2022 2023 Costs incurred during the year $ 2,640,000 $ 3,840,000 $ 3,240,000 Estimated costs to complete as of year-end 6,160,000 3,140,000 0
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 $ 2,640,000 $ 2,300,000 $ 2,926,000 Estimated costs to complete as of year-end 6,160,000 2,660,000 0 Billings during the year 2,080,000 2,860,000 5,060,000 Cash collections during the year 1,840,000 2,800,000 5,360,000 Westgate recognizes revenue over time according to percentage of completion. 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. (Do not round intermediate calculations and round your final answers to the nearest whole dollar amount. Loss amounts should be indicated with a minus sign.) 2021 2022 2023 Costs incurred during the year $ 2,640,000 $ 3,840,000 $ 3,240,000 Estimated costs to complete as of year-end 6,160,000 3,140,000 0
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter17: Advanced Issues In Revenue Recognition
Section: Chapter Questions
Problem 5MC
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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 | $ | 2,640,000 | $ | 2,300,000 | $ | 2,926,000 | |||
| Estimated costs to complete as of year-end | 6,160,000 | 2,660,000 | 0 | ||||||
| Billings during the year | 2,080,000 | 2,860,000 | 5,060,000 | ||||||
| Cash collections during the year | 1,840,000 | 2,800,000 | 5,360,000 | ||||||
Westgate recognizes revenue over time according to percentage of completion.
4. Calculate the amount of revenue and gross
| 2021 | 2022 | 2023 | |||||||
| Costs incurred during the year | $ | 2,640,000 | $ | 3,840,000 | $ | 3,240,000 | |||
| Estimated costs to complete as of year-end | 6,160,000 | 3,140,000 | 0 | ||||||
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