In 2024, 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 2026. Information related to the contract is as follows: 2024 $ 2,204,000 5,396,000 2,140,000 1,870,000 2025 $3,192,000 2,204,000 3,256,000 3,200,000 Cost incurred during the year Estimated costs to complete as of year-end Billings during the year Cash collections during the year Westgate recognizes revenue over time according to percentage of completion. 2026 $ 2,424,400 0 4,604,000 4,930,000 Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years, assuming the following cos mcurred and costs to complete information.
In 2024, 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 2026. Information related to the contract is as follows: 2024 $ 2,204,000 5,396,000 2,140,000 1,870,000 2025 $3,192,000 2,204,000 3,256,000 3,200,000 Cost incurred during the year Estimated costs to complete as of year-end Billings during the year Cash collections during the year Westgate recognizes revenue over time according to percentage of completion. 2026 $ 2,424,400 0 4,604,000 4,930,000 Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years, assuming the following cos mcurred and costs to complete information.
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 18RE
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In 2024, 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 2026. 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
Westgate recognizes revenue over time according to percentage of completion.
Costs incurred during the year
Estimated costs to complete as of year-end
Revenue
Gross profit (loss)
2024
$ 2,204,000
5,396,000
2,140,000
1,870,000
2024
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.
2025
2025
$ 3,192,000
2,204,000
3,256,000
3,200,000
Note: 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.
2024
$ 2,204,000
5,396,000
2026
2026
$ 2,424,400
2025
$ 3,870,000
3,170,000.
0
4,604,000
4,930,000
2026
$ 3,270,000
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