Required information In 2018, the Westgate Construction Company entered into a c

Question

Required information

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:

Westgate recognizes revenue over time according to percentage of completion.

Required: 1. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years. (Do not round intermediate calculations. Loss amounts should be indicated with a minus sign.)

2018 2019 2020 Cost incurred during the year $ 2,291,000 $ 3,555,000 $ 2,259,400 Estimated costs to complete as of year-end 5,609,000 2,054,000 0 Billings during the year 2,110,000 3,736,000 4,154,000 Cash collections during the year 1,855,000 3,500,000 4,645,000

Explanation / Answer

2018 2019 2020 A Contract Price 1,00,00,000 1,00,00,000 1,00,00,000 B Actual Cost to date 22,91,000 58,46,000 81,05,400 C Estimated Cost to Complete 56,09,000 2054000 D Total Estimated costs 79,00,000 79,00,000 E Estimated Gross Profit 21,00,000 21,00,000 18,94,600 F % of Completion    B/D 0.29 0.74 Revenue Recognized   F*A- Revenue Already recognized 2900000 4500000 26,00,000

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