Question

lis the jorrnal entries for 2021,2022,2023

Saved Help I Contracts 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 $2,239,800 Cost incurred during the year Estimated costs to complete as of year-end Billings during the year Cash collections during the year 2021 $2,610,000 6,390,000 2,100,000 1,850,000 2022 $3,162,000 2,028,000 3,672,000 3,000,000 4,228,000 5,150,000 Westgate recognizes revenue over time according to percentage of completion 2-0. 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 lournal below.complete the necessarv lournal entries for the vear 2023 (credit "Various accounts for construction costs < Prev 3 4 5 6 of 8 !!! Next > search

Answer 1

Calculations :

1)

	2021	2022	2023
Beginning work in process cost	0	2610000	5772000
Cost incurred during the year	2610000	3162000	2230800
Total cost incurred till date (A)	2610000	5772000	8002800
Estimate cost to complete (B)	6390000	2028000	0
Total cost of project [C=A+B]	9000000	7800000	8002800
% of completion [A/C]	2610000/9000000= 29%	5772000/7800000 74%	8002800/8002800 100%

2)

	2021	2022	2023
Contract revenue	10000000	10000000	10000000
less:Total cost to complete	-9000000	-7800000	-8002800
Gross profit	1000000	2200000	1997200
% of Gross profit to be recognized till date	1000000*29%= 290000	2200000*74%= 1628000	1997200*100%=1997200
less:Gross profit recognized in earlier years	0	-290000	-1628000
Gross profit to be recognized in current year	290000	1338000	369200

2a)

Date	Account title	Debit	credit
1	construction in progress	2610000
	Various accounts payable		2610000
2	Accounts receivable	2100000
	Billings on construction contract		2100000
3	cash	1850000
	Accounts receivable		1850000
4	construction expense	2610000
	construction in progress	290000
	revenue from long term contract (10000000*29%)		2900000

2b)

Date	Account title	Debit	credit
1	construction in progress	3162000
	Various accounts payable		3162000
2	Accounts receivable	3672000
	Billings on construction contract		3672000
3	cash	3000000
	Accounts receivable		3000000
4	construction expense	3162000
	construction in progress	1338000
	revenue from long term contract		4500000

2c)

Date	Account title	Debit	credit
1	construction in progress	2230800
	Various accounts payable		2230800
2	Accounts receivable	4228000
	Billings on construction contract		4228000
3	cash	5150000
	Accounts receivable		5150000
4	construction expense	2230800
	construction in progress	369200
	revenue from long term contract		2600000
5 (on completing the project)	Billings on construction contract	10000000
	construction in progress		10000000