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 $3,849,200 Cost incurred during the year Estimated costs to complete as of year-end Billings during the year Cash collections during the year 2021 $2,581,000 6,319,000 2,890,000 1,845,000 2022 $2,347,000 2,772,000 2,838,000 2,900,000 5,072,000 5,255,000 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.) 2021 $2,581,000 6,319,000 Costs incurred during the year Estimated costs to complete as of year-end 2022 $3,845,000 3,145,000 2023 $3,245,000 ® Answer is complete but not entirely correct.

Answer 1

Percentage Completion methad 2023 ($) 2012 2009 Cost Pnccrooed Pn tll 2,581,000 G,42G,000 2,581,000 3,845,000 3, 245,000 2, 581,000 6,426,000 9,671,000 paevious yearr Cot incuroed derofng the yoar Add Total cost Pnccrored 1ldate Add Estimated Cost to be inccaooed 6,319,000 3,145000 Totel estimated Cod- to be Pncciosed 8,900,000 9,5H,000 9,671000 peocentage of Completion CA) CcOst ncuroved tal date total 67-iu y. 29%. 100Y esfimated COst) 10,000,00 10,000.000 10B00,0O 2900,000 6,714000 10p00.000 TOtal evence CB) Total revenue decognzed CA*B) G,HU,000 Less Revenue recogn?zed in poevias yao 2.900,000 2 Ag000 3 814,000 Revence decognize Pncuot years 3,286000 2021 2022 2023 2,900000 3,8iu,000 3,286,000 Revenue 2,581,000 3,845p00 3,2u5,00 Cost Pnccied GroDsS paol- 319,000 - 31.000 41,000