Question

Required information

[The following information applies to the questions displayed below.]
  
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	$	2,204,000		$	3,192,000		$	2,424,400
Estimated costs to complete as of year-end		5,396,000			2,204,000			0
Billings during the year		2,140,000			3,256,000			4,604,000
Cash collections during the year		1,870,000			3,200,000			4,930,000

Westgate recognizes revenue over time according to percentage of completion.

3. Complete the information required below to prepare a partial balance sheet for 2018 and 2019 showing any items related to the contract. (Do not round intermediate calculations.)

Answer 1

	Balance Sheet (Partial)	2018		2019
	Current Assets:
	Accounts receivable		$       2,70,000		$       3,26,000
	Construction in progress	$     29,00,000		$      71,00,000
	Less: Billings	$   -21,40,000		$     -53,96,000
	Cost in excess of billings		$       7,60,000		$     17,04,000
	Current Liabilities:
	Working Notes:	2018	2019
	Cost incurred during the year	$     22,04,000	$     31,92,000
Add:	Cost incurred in previous year		$     22,04,000
	Cost incurred till date (i)	$     22,04,000	$     53,96,000
Add:	Estimated cost to complete	$     53,96,000	$     22,04,000
	Total cost (ii)	$     76,00,000	$     76,00,000
	Percentage Completed [(iii) = (i) / (ii)]	29%	71%
	Construction in progress [$10000000 X (iii)]	$     29,00,000	$     71,00,000
	Billings during the year	$     21,40,000	$     32,56,000
Less:	Cash collections during the year	1870000	3200000
	Accounts Receivable	$       2,70,000	$           56,000
Add:	Previous year balance		$       2,70,000
	Total Accounts receivables	$       2,70,000	$       3,26,000