Question
In: Accounting
In 2021, the Westgate Construction Company entered into a contract to construct a road for Santa...
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 | $ | 2,490,000 | $ | 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 year | 1,815,000 | 3,900,000 | 4,285,000 | ||||||
Westgate recognizes revenue over time according to percentage of
completion.
2-a. In the journal below, complete the
necessary journal entries for the year 2021 (credit "Various
accounts" for construction costs incurred).
2-b. In the journal below, complete the necessary
journal entries for the year 2022 (credit "Various accounts" for
construction costs incurred).
2-c. In the journal below, complete the necessary
journal entries for the year 2023 (credit "Various accounts" for
construction costs incurred).
Solutions
Expert Solution
2a) Journal Entries for 2021:
| Date | General Journal | Debit | Credit |
| 2021 | Construction In progress | 2490000 | |
| Materials, Cash, Payables | 2490000 | ||
| 2021 | Accounts Receivables | 2030000 | |
| Billings on Construction Contract | 2030000 | ||
| 2021 | Cash | 1815000 | |
| Accounts Receivables | 1815000 | ||
| 2021 | Construction In Progress | 510000 | |
| Construction Exp. | 2490000 | ||
| Revenue from Contract | 3000000 |
2b) Journal Entries for 2022:
| 2022 | Construction In progress | 3984000 | |
| Materials, Cash, Payables | 3984000 | ||
| 2022 | Accounts Receivables | 4444000 | |
| Billings on Construction Contract | 4444000 | ||
| 2022 | Cash | 3900000 | |
| Accounts Receivables | 3900000 | ||
| 2022 | Construction In Progress | 816000 | |
| Construction Exp. | 3984000 | ||
| Revenue from Contract | 4800000 |
2c) Journal Entries for 2023:
| Date | General Journal | Debit | Credit |
| 2023 | Construction In progress | 2008600 | |
| Materials, Cash, Payables | 2008600 | ||
| 2023 | Accounts Receivables | 3526000 | |
| Billings on Construction Contract | 3526000 | ||
| 2023 | Cash | 4285000 | |
| Accounts Receivables | 4285000 | ||
| 2023 | Construction In Progress | 191400 | |
| Construction Exp. | 2008600 | ||
| Revenue from Contract | 2200000 |
Working:
| % of Completion | |||
| Actual Costs to date / Total Estimated costs = % of completion | |||
| Actual Costs to date | Estimated total costs | ||
| 2021 | 2490000 | 8300000 | 30% |
| 2022 | 6474000 | 8300000 | 78% |
| 2023 | 8482600 | 8482600 | 100% |
ekkarill92 answered 2 years agoRelated Solutions
In 2021, the Westgate Construction Company entered into a contract to construct a road for Santa...
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
$
1,584,000
$
3,240,000
$
2,613,600
Estimated costs to complete as of year-end
5,616,000
2,376,000
0
Billings during the year
1,200,000
3,624,000
5,176,000
Cash collections during the year
1,000,000
2,800,000
6,200,000
Assume that Westgate Construction’s contract with Santa...
In 2021, the Westgate Construction Company entered into a contract to construct a road for Santa...
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
$
2,100,000
$
3,150,000
$
2,475,000
Estimated costs to complete as of year-end
5,400,000
2,250,000
0
Billings during the year
2,150,000
3,100,000
4,750,000
Cash collections during the year
1,875,000
3,100,000
5,025,000
Westgate recognizes revenue over time according to...
In 2021, the Westgate Construction Company entered into a contract to construct a road for Santa...
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
$
3,471,000
$
4,005,000
$
1,566,400
Estimated costs to complete as of year-end
5,429,000
1,424,000
0
Billings during the year
2,900,000
4,576,000
2,524,000
Cash collections during the year
2,700,000
4,500,000
2,800,000
Assume that Westgate Construction’s contract with Santa...
In 2021, the Westgate Construction company entered into a contract to construct a road for Santa...
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.
2018
2019
2020
Cost incurred during the year
$
2,044,000
$
2,628,000
$
2,890,800
Estimated costs to complete as of year-end
5,256,000
2,628,000
0
Billings during the year
2,170,000
2,502,000
5,328,000
Cash collections during the year
1,885,000
2,600,000
5,515,000
5. Calculate the amount of revenue and...
In 2021, the Westgate Construction company entered into a contract to construct a road for Santa...
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.
2018
2019
2020
Cost incurred during the year
$
2,044,000
$
2,628,000
$
2,890,800
Estimated costs to complete as of year-end
5,256,000
2,628,000
0
Billings during the year
2,170,000
2,502,000
5,328,000
Cash collections during the year
1,885,000
2,600,000
5,515,000
3. Complete the information required below to...
in 2021, the Westgate Construction Company entered into a contract to construct a road for Santa...
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 2020. Information related to
the contract is as follows: 2018 2019 2020 Cost incurred during the
year $ 2,044,000 $ 2,628,000 $ 2,890,800 Estimated costs to
complete as of year-end 5,256,000 2,628,000 0 Billings during the
year 2,170,000 2,502,000 5,328,000 Cash collections during the year
1,885,000 2,600,000 5,515,000 Westgate recognizes revenue over time
according to...
In 2021, the Westgate Construction Company entered into a contract to construct a road for Santa...
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
$
2,400,000
$
3,600,000
$
2,200,000
Estimated costs to complete as of year-end
5,600,000
2,000,000
0
Billings during the year
2,000,000
4,000,000
4,000,000
Cash collections during the year
1,800,000
3,600,000
4,600,000
Assume that Westgate Construction’s contract with Santa...
In 2021, the Westgate Construction Company entered into a contract to construct a road for Santa...
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 $ 2,072,000 $ 2,738,000 $ 2,849,000 Estimated costs to
complete as of year-end 5,328,000 2,590,000 0 Billings during the
year 2,160,000 2,650,000 5,190,000 Cash collections during the year
1,880,000 2,700,000 5,420,000 Westgate recognizes revenue over time
according to...
In 2021, the Westgate Construction Company entered into a contract to construct a road for Santa...
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 $ 2,072,000 $ 2,738,000 $ 2,849,000 Estimated costs to
complete as of year-end 5,328,000 2,590,000 0 Billings during the
year 2,160,000 2,650,000 5,190,000 Cash collections during the year
1,880,000 2,700,000 5,420,000 Westgate recognizes revenue over time
according to...
In 2021, the Westgate Construction Company entered into a contract to construct a road for Santa...
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
$
2,072,000
$
2,738,000
$
2,849,000
Estimated costs to complete as of year-end
5,328,000
2,590,000
0
Billings during the year
2,160,000
2,650,000
5,190,000
Cash collections during the year
1,880,000
2,700,000
5,420,000
Westgate recognizes revenue over time according to...
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