In: Accounting
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 | $ | 2,610,000 | $ | 3,162,000 | $ | 2,230,800 | |||
Estimated costs to complete as of year-end | 6,390,000 | 2,028,000 | 0 | ||||||
Billings during the year | 2,100,000 | 3,672,000 | 4,228,000 | ||||||
Cash collections during the year | 1,850,000 | 3,000,000 | 5,150,000 | ||||||
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.)
2018 | 2019 | 2020 | |||||||
Cost incurred during the year | $ | 2,610,000 | $ | 3,850,000 | $ | 3,250,000 | |||
Estimated costs to complete as of year-end | 6,390,000 | 3,150,000 | 0 | ||||||