In 2013, the Westgate Construction Company entered into a contract to construct
ID: 2498422 • Letter: I
Question
In 2013, 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 2015. Information related to the contract is as follows:
2013
2014
2015
Cost incurred during the year
$
3,219,000
$
3,915,000
$
1,722,600
Estimated costs to complete as of year-end
5,481,000
1,566,000
0
Billings during the year
2,700,000
4,434,000
2,866,000
Cash collections during the year
2,430,000
4,300,000
3,200,000
Westgate uses the completed contract method of accounting for long-term construction contracts.
Required:
3.
Complete the information required below to prepare a partial balance sheet for 2013 and 2014 showing any items related to the contract.
Current asset:
Account receivable????
Construction in process??????
Less: Billings
4.
Calculate the amount of gross profit (loss) to be recognized in each of the three years assuming the following costs incurred and costs to complete information.
2013
2014
2015
Costs incurred during the year
$
2,470,000
$
3,835,000
$
3,270,000
Estimated costs to complete as of year-end
5,670,000
3,170,000
0
5.
Calculate the amount of gross profit (loss) to be recognized in each of the three years assuming the following costs incurred and costs to complete information.
2013
2014
2015
Costs incurred during the year
$
2,470,000
$
3,835,000
$
4,005,000
Estimated costs to complete as of year-end
5,670,000
4,170,000
0
In 2013, 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 2015. Information related to the contract is as follows:
Explanation / Answer
3,219,000
8,856,600{3,219,000+3,915,000+1,722,600}
4) Gross Profit/loss
5)
Particulars 2013 2014 2015 Accounts Receivable 270,000 {2,700,000-2,430,000) 404,000 {4,434,000-4,300,000+270,000) 70,000 {2,866,000+404,000-3,200,000} Construction in progress3,219,000
7,134,000 {3,219,000+3,915,000}8,856,600{3,219,000+3,915,000+1,722,600}
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