Question

8 Required information (The following information applies to the questions displayed below.) Part 4 of 5 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: 10 points 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 2023 $2,926,000 0 5,060,000 5,360,000 eBook Westgate recognizes revenue over time according to percentage of completion. Print 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.) References Costs incurred during the year Estimated costs to complete as of year-end 2021 $2,640,000 6,160,000 2022 $3,840,000 3,140,000 2023 $3,240,000 2021 2022 2023 Revenue Gross profit (loss)

Answer 1

Costs Incurred during the year Accumulated cost Estimated cost to complete 2021 2022 2023 $ 26,40,000 $ 38,40,000 $ 32,40,000 $ 26,40,000 $ 64,80,000 $ 97,20,000 $ 61,60,000 $ 31,40,000 $ $ 88,00,000 $ 96,20,000 $ 97,20,000 30% 67% 100% $30,00,000 $ 67,35,967 $1,00,00,000 $ 26,40,000 $ 64,80,000 $ 97,20,000 $ 3,60,000 $ 2,55,967 $ 2,80,000 Percentage of Completion Revenue to be recognized less: Accumulated costs Gross Profit Revenue (Yearly) Gross Profit 2021 2022 2023 $30,00,000 $ 37,35,967 $ 32,64,033 $ 3,60,000 $ -1,04,033 $ 24,033

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