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 | $ | 2,400,000 | $ | 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 | ||||||
Westgate recognizes revenue over time according to percentage of completion.
5. 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 | $ | 2,400,000 | $ | 3,800,000 | $ | 3,900,000 | |||
| Estimated costs to complete as of year-end | 5,600,000 | 4,100,000 | 0 | ||||||
| 2021 | 2022 | 2023 | |
| Revenue | |||
| Gross profit (loss) |
Solutions
Expert Solution
Solution
| 2021 | 2022 | 2023 | |
| Revenue | $ 3,000,000 | $ 3,019,417 | $ 3,980,583 |
| Gross profit | $ 600,000 | $ (780,583) | $ 80,583 |
.
Working
| 2021 | 2022 | 2023 | ||
| A | Contract Price | $ 10,000,000 | $ 10,000,000 | $ 10,000,000 |
| B | Cost Incurred to Date | $ 2,400,000 | $ 6,200,000 | $ 10,100,000 |
| C | Estimated cost yet to be incurred to complete the contract | $ 5,600,000 | $ 4,100,000 | $ 0 |
| D = B+C | Total Cost | $ 8,000,000 | $ 10,300,000 | $ 10,100,000 |
| E = (D/B) x 100 | % of Completion | 30% | 60% | 100% |
| F = A x E | Revenue to date | $ 3,000,000 | $ 6,019,417 | $ 10,000,000 |
| G | Revenue of Previous year | $ 0 | $ 3,000,000 | $ 6,019,417 |
| H = F - G | Net Revenue this year | $ 3,000,000 | $ 3,019,417 | $ 3,980,583 |
| I | Cost to date | $ 2,400,000 | $ 6,200,000 | $ 10,100,000 |
| J | Cost to date of previous year | $ 0 | $ 2,400,000 | $ 6,200,000 |
| K = I - J | Net Cost for the year | $ 2,400,000 | $ 3,800,000 | $ 3,900,000 |
| L = H - K | Gross Profits | $ 600,000 | -$ 780,583 | $ 80,583 |
ekkarill92 answered 1 year 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
$
2,490,000
$
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...
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...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Merger Analysis TransWorld Communications Inc., a large telecommunications company, is evaluating the possible acquisition of Georgia...
- Journal Entries and Trial Balance Elite Realty acts as an agent in buying, selling, renting, and...
- In racket Assume that the elements of a list are indexed starting with 1. Write a...
- Describe System Development Life Cycle (SDLC) and how it is used.
- What symbolism do you find in the play,Oedipus?
- • Using the Scanner class to obtain input from the user. • Using printf to output...
- In each of the following situations, develop a tentative plan for the client. List the various...
ADVERTISEMENT