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In 2018, 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 2020. Information related to the contract is as follows:

	2018			2019			2020
Cost incurred during the year	$	2,580,000		$	4,042,000		$	2,175,800
Estimated costs to complete as of year-end		6,020,000			1,978,000			0
Billings during the year		2,060,000			4,562,000			3,378,000
Cash collections during the year		1,830,000			4,200,000			3,970,000

Westgate recognizes revenue over time according to percentage of completion.

rev: 09_15_2017_QC_CS-99734

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.)

	2018			2019			2020
Cost incurred during the year	$	2,580,000		$	3,830,000		$	3,230,000
Estimated costs to complete as of year-end		6,020,000			3,130,000			0

Answer 1

Calculation of Revenue and Gross Profit :-

Particulars	2018	2019	2020
Cost Incurred Each Year (a)	2580000	4042000	2175800
Cost Incurred to Date (b)	2580000	6622000	8797800
Estimated Costs (c)	6020000	1978000
Total Estimated Costs (d) = (b+c)	8600000	8600000	8797800
% Completed (e) = (b/d)*100	30%	77%	100%
Revenue (f) ($10000000*e)-Last year Revenue	3000000	4700000	2300000
Expenses (g)	2580000	4042000	2175800
Gross Profit (h) = (f-g)	420000	658000	124200