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Westgate Construction Company | 2018 | 2019 | 2020 | ||||||||||||
Ans to 1 | Calculation of Gross Profit | Ans to 2a and 2b | Journal Entries | Debit $ | Credit $ | Debit $ | Credit $ | Debit $ | Credit $ | ||||||
Particulars | 2018 | 2019 | 2020 | Costs Incurred | CIP (Work-in-progress) | 2,604,000 | 4,032,000 | 1,940,400 | |||||||
Contract Price | 10,000,000 | 10,000,000 | 10,000,000 | A | Cash | 2,604,000 | 4,032,000 | 1,940,400 | |||||||
Cost Incurred during the year | 2,604,000 | 4,032,000 | 1,940,400 | B | |||||||||||
Estimated cost to complete | 5,796,000 | 1,764,000 | - | C | Billing | Accounts Receivable | 2,040,000 | 4,596,000 | 3,364,000 | ||||||
Cost Incurred to date | 2,604,000 | 6,636,000 | 8,576,400 | D | Billing on CIP | 2,040,000 | 4,596,000 | 3,364,000 | |||||||
(Sum total of the cost incurred during the year) | |||||||||||||||
Estimated total cost | 8,400,000 | 8,400,000 | 8,576,400 | E=C+D | Receiving Payments | Cash | 1,820,000 | 4,000,000 | 4,180,000 | ||||||
Percentage complete | 31.00% | 79.00% | 100.00% | F=D/E | Accounts Receivable | 1,820,000 | 4,000,000 | 4,180,000 | |||||||
(Cost Incurred to date/Estimated total cost) | |||||||||||||||
Revenue to be recognized | 3,100,000 | 4,800,000 | 2,100,000 | G | Period end adjustments for Revenue | Construction Expense | 2,604,000 | 4,032,000 | 1,940,400 | ||||||
(Contract Price*Percentage complete)- revenue previously recognized | (Gross Profit entry) | CIP (Work-in-progress) | 496,000 | 768,000 | 159,600 | ||||||||||
Year 2018: 31% completed. Revenue recognized = 31% x $ 10,000,000 = $ 3,100,000. | Construction Revenue | 3,100,000 | 4,800,000 | 2,100,000 | |||||||||||
Year 2019: 79% completed. Revenue recognized = 79% x $ 10,000,000 – $ 3,100,000 (previously recognized) = $ 4,800,000. | |||||||||||||||
Year 2020: 100% completed. Revenue recognized = 100% x $ 10,000,000 – $ 3,100,000- $ 4,800,000 (previously recognized) = $ 2,100,000. | Closing Entry | Billing on CIP | 10,000,000 | ||||||||||||
Gross Profit/(Loss) | 496,000 | 768,000 | 159,600 | H=G-B | CIP (Work-in-progress) | 10,000,000 | |||||||||
Billings during the year | 2,040,000.00 | 4,596,000.00 | 3,364,000.00 | ||||||||||||
Collection during the year | 1,820,000.00 | 4,000,000.00 | 4,180,000.00 |
Required information [The following information applies to the questions displayed below.] In 2018, the Westgate Construction...
Required information (The following information applies to the questions displayed below.) 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: 2020 $1,940,400 Cost incurred during the year Estimated costs to complete as of year-end Billings during the year Cash collections during the year 2018 $2,604,000 5,796,000 2,040,000 1,820,000 2019 $4,032,000 1,764,000 4,596,000 4,000,000 3,364,000 4,180,000...
Required information (The following information applies to the questions displayed below.] 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: 2020 $1,940,400 Cost incurred during the year Estimated costs to complete as of year-end Billings during the year Cash collections during the year 2018 $ 2,604,000 5,796,000 2,040,000 1,820,000 2019 $4,032,000 1,764,000 4,596,000 4,000,000 3,364,000...
Required information [The following information applies to the questions displayed below.] In 2018, the Westgate Construction Company entered intoo 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 Estimated costs to complete as of year-end Billings during the year Cash collections during the year $4,032,000 1,764,000 4,596,000 4,000,000 $2,604,000 5,796,000 2,040,000 1,820,000 $1,940,400 3,364,000 4,180,000...
! Required information [The following information applies to the questions displayed below.] 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: 2020 $1,940,400 2018 $2,604,000 5,796,000 2,040,000 1,820,000 2019 $4,032,000 1,764,000 Cost incurred during the year Estimated costs to complete as of year-end Billings during the year Cash collections during the year 4,596,000 4,000,000 3,364,000...
Required information [The following information applies to the questions displayed below.] 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 $ 2,604,000 $ 4,032,000 $ 1,940,400 Estimated costs to complete as of year-end 5,796,000 1,764,000 0 Billings during the year 2,040,000 4,596,000 3,364,000 Cash collections during the...
Required information [The following information applies to the questions displayed below.] 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 $ 2,604,000 $ 4,032,000 $ 1,940,400 Estimated costs to complete as of year-end 5,796,000 1,764,000 0 Billings during the year 2,040,000 4,596,000 3,364,000 Cash collections during the...
Required information [The following information applies to the questions displayed below.] 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 $ 2,604,000 $ 4,032,000 $ 1,940,400 Estimated costs to complete as of year-end 5,796,000 1,764,000 0 Billings during the year 2,040,000 4,596,000 3,364,000 Cash collections during the...
Required information The following information applies to the questions displayed below.) 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: 2020 $2,200,000 Cost incurred during the year Estimated costs to complete as of year-end Billings during the year Cash collections during the year 2018 $2,400,000 5,600,000 2,000,000 1,800,000 2019 $3,600,000 2,000,000 4,000,000 3,600,000 4,000,000 4,600,000...
Required Information [The following information applies to the questions displayed below.) 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: 2023 $1,940,400 Cost incurred during the year Estimated costs to complete as of year-end Billings during the year Cash collections during the year 2021 $2,604,000 5,796,000 2,040,000 1, 820, 000 2022 $4,032,000 1,764,000 4,596,000 4,000,000...
The following information applies to the questions displayed below 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: 2020 2019 2,542,000 $3,772,000 $2,074,600 1,886,000 2,020,000 4,294,000 3,686,000 1,810,000 3,800,000 4,390,000 2018 Cost incurred during the year Estimated costs to complete as of year-end Billinga during the year Cash collections during the year 5, 658,000 Westgate...