Question

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 $2,074,600 Cost incurred during the year Estimated costs to complete as of year-end Billings during the year Cash collections during the year 2018 $ 2,542,000 5,658,000 2,020,000 1,810,000 2019 $3,772,000 1,886,000 4,294,000 3,800,000 3,686,000 4,390,000 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.) 2018 $2,542,000 5,658,000 Cost incurred during the year Estimated costs to complete as of year-end 2019 $3,810,000 3,110,000 2020 $3,210,000 2018 2019 2020 Revenue 3,100,000 Gross profit (loss) | $ 558,000

Answer 1

Contract price	$10,000,000
	2018	2019	2020
Cost incurred during the year	$2,542,000	$3,810,000	$3,210,000
Cumulateive cost incurred	$2,542,000	$6,352,000	$9,562,000
Estimated cost to complete as of year-end	$5,658,000	$3,110,000	$0
	$8,200,000	$9,462,000	$9,562,000
% of completion(cumulative)	31.00%	67.13%	100.00%
	2018	2019	2020
Revenue(Cumulative)	$3,100,000	$6,713,168	$10,000,000
Revenue per year	$3,100,000	$3,613,168	$3,286,832
Cost incurred	$2,542,000	$3,810,000	$3,210,000
Gross profit	$558,000	-$196,832	$76,832

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