Question
In: Accounting
Required information [The following information applies to the questions displayed below.] In 2021, the Westgate Construction...
Required information
[The following information applies to the questions
displayed below.]
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 | $ | 2,580,000 | $ | 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.
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.)
| 2021 | 2022 | 2023 | |||||||
| Costs 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 | ||||||
Solutions
Expert Solution
Calculation of Percentage of Completion for the Year ending 2021,2022 and 2023
| 2021 | 2022 | 2023 | |
|
Cost incurred up to the end of the year (A) |
$ 2580000 |
$ 6410000 ($ 2580000 + $ 3830000) |
$ 9640000 ($ 2580000 + $ 3830000 + $ 3230000) |
| Estimated costs to complete as of year-end | $ 6020000 | $ 3130000 | $ 0 |
| Total Cost end of the year (B) | $ 8600000 | $ 9540000 | $ 9640000 |
| Percentage of Completion (A / B) | 30 % | 67.20 % | 100 % |
Calculation of the amount of revenue and gross profit (loss) to be recognized in each of the three years
| 2021 | 2022 | 2023 | |
|
Contract Amount |
$ 10000000 |
$ 10000000 |
$ 10000000 |
| Percentage of Completion | 30 % | 67.20 % | 100 % |
| Revenue upto end of the year | $ 3000000 | $ 6720000 | $ 10000000 |
| Less: Revenue already recognized in Previous years | $ 0 | ($ 3000000) | ($ 6720000) |
| Revenue recognized during the year | $ 3000000 | $ 3720000 | $ 3280000 |
| Less: Cost incurred during the year | ($ 2580000) | ($ 3830000) | ($ 3230000) |
| Gross Profit / (loss) | $ 420000 | ($ 110000) | $ 50000 |
ekkarill92 answered 1 year agoRelated Solutions
Required information [The following information applies to the questions displayed below.] In 2021, the Westgate Construction...
Required information
[The following information applies to the questions
displayed below.]
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
$
2,580,000
$
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...
Required information [The following information applies to the questions displayed below.] In 2021, the Westgate Construction...
Required information
[The following information applies to the questions
displayed below.]
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
$
2,204,000
$
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 2021, the Westgate Construction...
Required information
[The following information applies to the questions
displayed below.]
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
$
2,640,000
$
2,300,000
$
2,926,000
Estimated costs to complete as of year-end
6,160,000
2,660,000
0
Billings during the year
2,080,000
2,860,000
5,060,000
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 $ 2,490,000 $ 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...
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
$
2,604,000
$
4,032,000
$
1,940,400
Estimated costs to complete as of year-end
5,796,000
1,764,000
0
Billings during the year
2,040,000
4,596,000
3,364,000
Cash collections during the...
[The following information applies to the questions displayed below.] In 2021, the Westgate Construction Company entered...
[The following information applies to the questions
displayed below.]
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
$
2,450,000
$
2,695,000
Estimated costs to complete as of year-end
4,900,000
2,450,000
0
Billings during the year
2,200,000
2,350,000
5,450,000
Cash collections during the year
1,900,000...
[The following information applies to the questions displayed below.] In 2021, the Westgate Construction Company entered...
[The following information applies to the questions
displayed below.]
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
$
2,542,000
$
3,772,000
$
2,074,600
Estimated costs to complete as of year-end
5,658,000
1,886,000
0
Billings during the year
2,020,000
4,294,000
3,686,000
Cash collections during the year
1,810,000...
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