Question

0 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 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 Billings during the year Cash collections during the year 5,658,000 Westgate recognizes revenue over time according to percentage of completion.

Answer 1

		2018
Cost incurred during the year	A	2,542,000
Estimated Cost	B	5,658,000
Total Estimated Cost	C=A+B	8,200,000
Contract Value	D	10,000,000
Revenue for 2018	E=(A/C)*D	3,100,000
Gross Profit	E-A	558,000
		2019
Earlier Cost incurred	A	2,542,000
Cost incurred during the year	B	3,772,000
Estimated Cost	C	1,886,000
Total Estimated Cost	D=A+B+C	8,200,000
Contract Value	D	10,000,000
Total Revenue Shoul be booked	E=((A+B)/C)*D	7,700,000
Less: Revenue allready booked in 2018	F	3,100,000
Revenue for 2019	G=E-F	4,600,000
Gross Profit	G-B	828,000
		2020
Contract Value	A	10,000,000
Revenue Booked in 2018	B	3,100,000
Revenue Booked in 2019	C	4,600,000
Revenue for 2020	D=A-B-C	2,300,000
Cost Incurred	E	2,074,600
Gross Profit	D-E	225,400
	2018	2019	2020
Revenue	$3,100,000	$4,600,000	$2,074,600
Gross profit	$558,000	$828,000	$225,400