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 | $ | 2,640,000 | $ | 2,300,000 | $ | 2,926,000 | |||
Estimated costs to complete as of year-end | 6,160,000 | 2,660,000 | 0 | ||||||
Billings during the year | 2,080,000 | 2,860,000 | 5,060,000 | ||||||
Cash collections during the year | 1,840,000 | 2,800,000 | 5,360,000 | ||||||
Westgate recognizes revenue over time according to percentage of
completion.
Problem 6-10 (Algo) Part 5
5. 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 | 2022 | 2023 | |||||||
Costs incurred during the year | $ | 2,640,000 | $ | 3,840,000 | $ | 4,020,000 | |||
Estimated costs to complete as of year-end | 6,160,000 | 4,180,000 | 0 | ||||||
Answers
2021 |
2022 |
2023 |
|
Revenue |
$ 3,000,000.00 |
$ 3,078,799 |
$ 3,921,201 |
Gross Profit (Loss) |
$ 360,000.00 |
$ (1,020,000.00) |
$ 160,000.00 |
Working |
2021 |
2022 |
2023 |
|
A |
Contract Price |
$ 10,000,000.00 |
$ 10,000,000.00 |
$ 10,000,000.00 |
B |
Cost Incurred to Date |
$ 2,640,000.00 |
$ 6,480,000.00 |
$ 10,500,000.00 |
C |
Estimated cost yet to be incurred to complete the contract |
$ 6,160,000.00 |
$ 4,180,000.00 |
$ - |
D = B+C |
Total Cost |
$ 8,800,000.00 |
$ 10,660,000.00 |
$ 10,500,000.00 |
E = (B/D) x 100 |
% of Completion |
30.00% |
60.79% |
100.00% |
F = A x E |
Revenue to date |
$ 3,000,000.00 |
$ 6,078,799.25 |
$ 10,000,000.00 |
G |
Revenue of Previous year |
$ - |
$ 3,000,000.00 |
$ 6,078,799.25 |
H = F - G |
Net Revenue this year |
$ 3,000,000.00 |
$ 3,078,799.25 |
$ 3,921,200.75 |
I (=B) |
Cost to date |
$ 2,640,000.00 |
$ 6,480,000.00 |
$ 10,500,000.00 |
J |
Cost to date of previous year |
$ - |
$ 2,640,000.00 |
$ 6,480,000.00 |
K = I - J |
Net Cost for the year |
$ 2,640,000.00 |
$ 3,840,000.00 |
$ 4,020,000.00 |
L = A - D |
Estimated Gross Profit (Loss) |
$ 1,200,000.00 |
$ (660,000.00) |
$ (500,000.00) |
M |
Gross Profit (Loss) to be recognised |
$ 360,000.00 |
$ (1,020,000.00) |
$ 160,000.00 |
In 2021, the Westgate Construction Company entered into a contract to construct a road for Santa...
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 $ 2,640,000 $ 2,300,000 $ 2,926,000 Estimated costs to complete as of year-end 6,160,000 2,660,000 0 Billings during the year 2,080,000 2,860,000 5,060,000 Cash collections during the year 1,840,000 2,800,000 5,360,000 Westgate recognizes revenue over time according to...
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 $2,926,000 Cost incurred during the year Estimated costs to complete as of year-end Billings during the year Cash collections during the year 2021 $2,640,000 6,160,000 2,080,000 1,840,000 2022 $2,300,000 2,660,000 2,860,000 2,800,000 5,060,000 5,360,000 Westgate recognizes revenue over time according to percentage of completion. Problem...
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Required information Problem 6-10 (Algo) Long-term contract; revenue recognition over time (LO6-8, 6-9] 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: Cost incurred during the year Estimated costs to complete as of year-end Billings during the year Cash collections during the year 2021 $ 2,640,000...
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