In 2024, 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 2026. Information related to the contract is as follows: Cost Incurred during the year Estimated costs to complete as of year-end Billings during the year Cash collections during the year 4. Calculate the amount of revenue and Incurred and costs to complete Information. Assume that Westgate Construction's contract with Santa Clara County does not qualify for revenue recognition over time. Required: 1. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years. 2-a. In the Journal below, complete the necessary Journal entries for the year 2024 (credit "Cash, Materials, etc." for construction costs Incurred). Cost Incurred during the year Estimated costs to complete as of year-end 2-b. In the Journal below, complete the necessary Journal entries for the year 2025 (credit "Cash, Materials, etc. for construction costs Incurred). 2-c. In the Journal below, complete the necessary Journal entries for the year 2026 (credit "Cash, Materials, etc." for construction costs Incurred). 3. Complete the Information required below to prepare a partlal balance sheet for 2024 and 2025 showing any items related to the contract. profit (loss) to be recognized in each of the three years, assuming the following costs Cost Incurred during the year Estimated costs to complete as of year-end Req 1 Req ZA Balance Sheet (Partial) Current assets: Complete this question by entering your answers in the tabs below. 2024 $ 2,739,000 5,561,000 2,300,000 2,100,000 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. Construction in progress Accounts receivable Loss: Billings Current liabilities: Req 28 Req 20 2024 $ 2.430.000 5,630,000 2024 5 2024 $ 2,430,000 5.630.000 2025 $ 3,735,000 1,826,000 4,174,000 3,900,000 Reg 3 2025 $ 3,815,000 3,130,000 0 (2825) $3,815,000 4,130,000 Reg 4 2826 $ 2,008,600 Complete the information required below to prepare a partial balance sheet for 2024 and 2025 showing any items related to the contract. 3,526,000 4,000,000 2026 $ 2026 $ 3,230,000 Req 5 8 2026 $ 3,945,000

In 2024, 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 2026. Information related to the contract is as follows: Cost Incurred during the year Estimated costs to complete as of year-end Billings during the year Cash collections during the year 4. Calculate the amount of revenue and Incurred and costs to complete Information. Assume that Westgate Construction's contract with Santa Clara County does not qualify for revenue recognition over time. Required: 1. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years. 2-a. In the Journal below, complete the necessary Journal entries for the year 2024 (credit "Cash, Materials, etc." for construction costs Incurred). Cost Incurred during the year Estimated costs to complete as of year-end 2-b. In the Journal below, complete the necessary Journal entries for the year 2025 (credit "Cash, Materials, etc. for construction costs Incurred). 2-c. In the Journal below, complete the necessary Journal entries for the year 2026 (credit "Cash, Materials, etc." for construction costs Incurred). 3. Complete the Information required below to prepare a partlal balance sheet for 2024 and 2025 showing any items related to the contract. profit (loss) to be recognized in each of the three years, assuming the following costs Cost Incurred during the year Estimated costs to complete as of year-end Req 1 Req ZA Balance Sheet (Partial) Current assets: Complete this question by entering your answers in the tabs below. 2024 $ 2,739,000 5,561,000 2,300,000 2,100,000 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. Construction in progress Accounts receivable Loss: Billings Current liabilities: Req 28 Req 20 2024 $ 2.430.000 5,630,000 2024 5 2024 $ 2,430,000 5.630.000 2025 $ 3,735,000 1,826,000 4,174,000 3,900,000 Reg 3 2025 $ 3,815,000 3,130,000 0 (2825) $3,815,000 4,130,000 Reg 4 2826 $ 2,008,600 Complete the information required below to prepare a partial balance sheet for 2024 and 2025 showing any items related to the contract. 3,526,000 4,000,000 2026 $ 2026 $ 3,230,000 Req 5 8 2026 $ 3,945,000

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter17: Advanced Issues In Revenue Recognition

Section: Chapter Questions

Problem 19RE

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