ework Probl.. X d, or Drop Classes mework Probiems in 2018, the Westgate Corstru
ID: 2435987 • Letter: E
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ework Probl.. X d, or Drop Classes mework Probiems in 2018, the Westgate Corstructon Company entered Into a contract to consaruct a roed for Sarta Clara County for $10,000.000. The road was compieted in 2020 Information related to the contract is as follows Cost ineurred during the year $2,156, 000 $3,380, 000 $2,371,600 Estinated costs to complete as of year-end Billings doring the year Cash collections duzing the year 1,865,000 3,300,000 4,825,000 156, 000 2, 120,000 3,414,000 4,456,000 Westgate recogntzes revenue over tme according to percentage of compietion Requlred t Calculate the amount of revenue and gross proft poss) to be recogitzed in each of the three years. 2-a in the journal below, complete the necessary journal entries for the year 2018 (credit Valous accounts" for construction costs incurred 2b. in the joumai beiow, complete the necessary journal entries for the year 2019 (creat Vartous accounts" for construction costs Incurred 2- in the jounal below, compiete the necessary journai entries tor the year 2020 (credt various accounts tor construction costs Incurredj S Compiete the information requred below to prepare a partal baiance sheet for 2018 and 2019 showing any hems retated to the contract 4 Caiculate Incurred and costs to complete intormation the amount of revenue ana gross profs poss) to be recognized in each of the three years assuming the toliowing costs 201820192020 $2156,000 $3,865,000 $3,265, 000 Cost incurred during the year Estinated costs to compiete as of 5, 544,000 3,165,000 year-end 5. Cacuate the amount of revenue ana gross prom (oss to be recognized in each of tne three years assuming the fosowing costs Incurred and costs to complete informasion 2019 Cost incurred during the year ?2, 156,000 12,865,000 31,095,000 Estimated costs to compiete as of s,544,000 4,230,000 year-end Compiete this question by entering your answers in the tabs below Re4 25Explanation / Answer
Answer 1. Percentage of Completion Method 2018 2019 2020 Cost Incurred each year 2,156,000 3,388,000 2,371,600 Cost Incurred to date 2,156,000 5,544,000 7,915,600 Estimated Costs 5,544,000 2,156,000 - Total Estimated Costs 7,700,000 7,700,000 7,915,600 % Completed 28.00% 72.00% 100.00% Revenue 2,800,000 4,400,000 2,800,000 Expenses 2,156,000 3,388,000 2,371,600 Gross Profit 644,000 1,012,000 428,400 Revenue - 2018 - $10,000,000 X 28% = $2,800,000 2019 - $10,000,000 X 72% - $2,800,000 = $4,400,000 2020 = $10,000,000 - ($2,800,000 + $4,400,000) = $2,800,000 Answer 2. Journal Entry Date Particulars Dr. Amt. Cr. Amt. 2018 1 Construction in Progress 2,156,000.00 Cash 2,156,000.00 2 Accounts Receivable 2,130,000.00 Billings on Contract 2,130,000.00 3 Cash 1,865,000.00 Accounts Receivable 1,865,000.00 4 Construction in Progress 644,000.00 Construction Expense 2,156,000.00 Construction Revenue 2,800,000.00 2019 1 Construction in Progress 3,388,000.00 Cash 3,388,000.00 2 Accounts Receivable 3,414,000.00 Billings on Contract 3,414,000.00 3 Cash 2,300,000.00 Accounts Receivable 2,300,000.00 4 Construction in Progress 1,012,000.00 Construction Expense 3,388,000.00 Construction Revenue 4,400,000.00 2020 1 Construction in Progress 2,371,600.00 Cash 2,371,600.00 2 Accounts Receivable 4,456,000.00 Billings on Contract 4,456,000.00 3 Cash 4,835,000.00 Accounts Receivable 4,835,000.00 4 Construction in Progress 428,400.00 Construction Expense 2,371,600.00 Construction Revenue 2,800,000.00 5 Billings on Contract 10,000,000.00 Construction in Progress 10,000,000.00 Answer 3. Balance Sheet (Partial) 2018 2019 Current Assets Accounts Receivables 265,000.00 1,379,000.00 Cost & Profits > Billings 670,000.00 935,000.00 1,656,000.00 3,035,000.00 Answer 4. Percentage of Completion Method 2018 2019 2020 Cost Incurred each year 2,156,000 3,865,000 3,265,000 Cost Incurred to date 2,156,000 6,021,000 9,286,000 Estimated Costs 5,544,000 3,165,000 - Total Estimated Costs 7,700,000 9,186,000 9,286,000 % Completed 0 1 1 Revenue 2,800,000 3,754,540 3,445,460 Expenses 2,156,000 3,865,000 3,265,000 Gross Profit 644,000 (110,460) 180,460 Revenue - 2018 - $10,000,000 X 28% = $2,800,000 2019 - $10,000,000 X 65.55% - $2,800,000 = $3,754,540 2020 = $10,000,000 - ($2,800,000 + $3,754,540) = $3,445,460 Answer 5. Percentage of Completion Method 2018 2019 2020 Cost Incurred each year 2,156,000 3,865,000 4,095,000 Cost Incurred to date 2,156,000 6,021,000 10,116,000 Estimated Costs 5,544,000 4,230,000 - Total Estimated Costs 7,700,000 10,251,000 10,116,000 % Completed 28.00% 58.74% 100.00% Revenue 2,800,000 3,073,573 4,126,427 Expenses 2,156,000 3,865,000 4,095,000 Gross Profit 644,000 (791,427) 31,427 Revenue - 2018 - $10,000,000 X 28% = $2,800,000 2019 - $10,000,000 X 58.74% - $2,800,000 = $3,073,573 2018 = $10,000,000 - ($2,800,000 + $3,073,573) = $4,126,427
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