Question

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 $2,259,400 Cost incurred during the year Estimated costs to complete as of year-end Billings during the year Cash collections during the year 2021 $2,291,000 5,609,000 2,110,000 1,855,000 2022 $3,555,000 2,054,000 3,736,000 3,500,000 4,154,000 4,645,000 Westgate recognizes revenue over time according to percentage of completion. 4. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years assuming the following costs incurred and costs to complete information. (Do not round intermediate calculations and round your final answers to the nearest whole dollar amount. Loss amounts should be indicated with a minus sign.) c021 2021 $2,291,000 5,609,000 Costs incurred during the year Estimated costs to complete as of year-end 2022 $3,855,000 3,155,000 2023 $3,255,000 2022 2023 Revenue Gross profit (loss) $ $ 2021 2,900,000 609,000

Answer 1

Price	10000000	10000000	1,00,00,000
	2021	2022	2023
Cost to date	2291000	6146000	9401000
Estimated cost to complete	5609000	3155000	0
Progress billing to date	2110000	3736000	4154000
Estimated total cost	79,00,000	93,01,000	94,01,000
Estimated gross profit	21,00,000	6,99,000	5,99,000
a) Percentage of completion		Caln
Gross Profit recognized in 2021	6,09,000	(2291000/7900000*2100000)
Loss recognized in 2022	-1,47,108	(6146000/9301000)*699000-609000
Loss recognized in 2022	1,37,108	(599000-609000+147108)

b) Percentage of completion		Caln
Revenue recognized in 2021	29,00,000	(2291000/7900000*10000000)
Revenue recognized in 2022	37,07,892	(6146000/9301000)*10000000-2900000
Revenue recognized in 2022	33,92,108	(10000000-2900000-3707892)