Question

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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 $2,550,000   $4,250,000   $ 1,870,000  Estimated costs to complete as of year-end 5,950,000     1,700,000     0  Billings during the year 2,050,000    4,750,000    3,200,000  Cash collections during the year   1,825,000     4,100,000    4,075,000  

Westgate recognizes revenue over time according to percentage of completion

2-a. In the journal below, complete the necessary journal entries for the year 2021 (credit "Various accounts" for construction costs incurred). 2-b. In the journal below, complete the necessary journal entries for the year 2022 (credit "Various accounts" for construction costs incurred). 2-c. In the journal below, complete the necessary journal entries for the year 2023 (credit "Various accounts" for construction costs incurred).
Complete this question by entering your answers in the tabs below.
In the journal below, complete the necessary journal entries for the year 2021 (credit "Various accounts" for construction costs incurred). (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Req 2A Req 2B Req 2C For all three years
Record construction costs.

Record progress billings.

Record cash collections.

Record gross profit (loss).

all of the requirements thank you

Answer 1

Part 2A

Date	general journal	debit	credit
2021	construction in progress	2550000
	Various accounts		2550000
2021	accounts receivable	2050000
	Bills on construction contract		2050000
2021	cash	1825000
	Accounts receivable		1825000
2021	construction in progress	450000
	Cost of construction	2550000
	Revenue from long-term contracts		3000000

Revenue = (2550000/(2550000+5950000))*10000000 = 3000000

Part 2 B

Date	general journal	debit	credit
2022	construction in progress	4250000
	Various accounts		4250000
2022	accounts receivable	4750000
	Bills on construction contract		4750000
2022	cash	4100000
	Accounts receivable		4100000
2022	construction in progress	750000
	Cost of construction	4250000
	Revenue from long-term contract		5000000

Revenue = ((2550000+4250000)/( 2550000+4250000+1700000))*10000000 = 8000000-3000000 = 5000000

Part 2 C

Date	general journal	debit	credit
2023	construction in progress	1870000
	Various accounts		1870000
2023	Accounts receivable	3200000
	Bills on construction contract		3200000
2023	Cash	4075000
	Accounts receivable		4075000
2023	Construction in progress	130000
	Cost of construction	1870000
	Revenue from long-term contract		2000000

Revenue = 10000000-3000000-5000000 = 2000000