Question
In: Accounting
Required information [The following information applies to the questions displayed below.] In 2018, the Westgate...
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.
Required:
1. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years. (Do not round intermediate calculations. Loss amounts should be indicated with a minus sign.)
Solutions
Expert Solution
|
2018 |
2019 |
2020 |
|
|
Revenue |
$ 29,00,000.00 |
$ 42,00,000.00 |
$ 29,00,000.00 |
|
Gross profit |
$ 6,96,000.00 |
$ 10,08,000.00 |
$ 4,75,600.00 |
Working
|
Working |
2018 |
2019 |
2020 |
|
|
A |
Contract Price |
$ 1,00,00,000 |
$ 1,00,00,000 |
$ 1,00,00,000 |
|
B |
Cost Incurred to Date |
$ 22,04,000 |
$ 53,96,000 |
$ 78,20,400 |
|
C |
Estimated cost yet to be incurred to complete the contract |
$ 53,96,000 |
$ 22,04,000 |
$ - |
|
D = B+C |
Total Cost |
$ 76,00,000 |
$ 76,00,000 |
$ 78,20,400 |
|
E = (D/B) x 100 |
% of Completion |
29% |
71% |
100% |
|
F = A x E |
Revenue to date |
$ 29,00,000.00 |
$ 71,00,000.00 |
$ 1,00,00,000.00 |
|
G |
Revenue of Previous year |
$ - |
$ 29,00,000.00 |
$ 71,00,000.00 |
|
H = F - G |
Net Revenue this year |
$ 29,00,000.00 |
$ 42,00,000.00 |
$ 29,00,000.00 |
|
I |
Cost to date |
$ 22,04,000.00 |
$ 53,96,000.00 |
$ 78,20,400.00 |
|
J |
Cost to date of previous year |
$ - |
$ 22,04,000.00 |
$ 53,96,000.00 |
|
K = I - J |
Net Cost for the year |
$ 22,04,000.00 |
$ 31,92,000.00 |
$ 24,24,400.00 |
|
L = H - K |
Gross Profits |
$ 6,96,000.00 |
$ 10,08,000.00 |
$ 4,75,600.00 |
ekkarill92 answered 9 months agoRelated Solutions
Required information [The following information applies to the questions displayed below.] In 2018, the Westgate...
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
$
2,550,000
$
4,250,000
$
1,870,000
Estimated costs to complete as
of year-end
5,950,000
1,700,000
0
Billings during the year
2,050,000
4,750,000
3,200,000
Cash collections during...
Required information [The following information applies to the questions displayed below.] In 2018, the Westgate...
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
$
2,291,000
$
3,555,000
$
2,259,400
Estimated costs to complete as of year-end
5,609,000
2,054,000
0
Billings during the year
2,110,000
3,736,000
4,154,000
Cash collections during...
Required information [The following information applies to the questions displayed below.] In 2018, the Westgate...
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...
Required information [The following information applies to the questions displayed below.] In 2018, the Westgate...
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...
Required information [The following information applies to the questions displayed below.] In 2018, the Westgate...
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...
Required information [The following information applies to the questions displayed below.] In 2018, the Westgate...
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...
Required information [The following information applies to the questions displayed below.] In 2018, the Westgate...
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...
Required information [The following information applies to the questions displayed below.] In 2018, the Westgate Construction...
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 $ 2,490,000 $ 3,984,000 $ 2,008,600 Estimated costs
to complete as of year-end 5,810,000 1,826,000 0 Billings during
the year 2,030,000 4,444,000 3,526,000 Cash collections during the...
Required information [The following information applies to the questions displayed below.] In 2018, the Westgate Construction...
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...
Required information [The following information applies to the questions displayed below.] In 2018, the Westgate Construction...
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...
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