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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
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 | ||||||
Answer is complete but not entirely correct.
|
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.
(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 | $ | 4,020,000 | |||
| Estimated costs to complete as of year-end | 6,160,000 | 4,180,000 | 0 | ||||||
Answer is complete but not entirely correct.
|
Answer 4 :
| 2021 | 2022 | 2023 | |
| Revenue | $ 3,000,000 | $ 3,735,967 | $ 3,264,033 |
| Gross profit | $ 360,000 | $ -104,033 | $ 24,033 |
Answer 5 :
| 2021 | 2022 | 2023 | |
| Revenue | $ 3,000,000 | $ 3,078,799 | $ 3,921,201 |
| Gross profit | $ 360,000 | $ -761,201 | $ -98,799 |
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