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In 2021, the Westgate Construction Company entered into a contract to construct a road for Santa Clara County for $10,000,000
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 $3,649, 280 Cost incurred during the year Estimated costs to complete as of year-end Billings during the year Cash collections during the year 2021 $2,581,080 6,319, eee 2,090, eee 1,845,800 2022 $2,347,000 2,772,eee 2,838,eee 2,900,00 5,072,800 5,255,000 Westgate recognizes revenue over time according to percentage of completion. 2-a. 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 journal below.complete the necessary journal entries for the year 2023 (credit "Various accounts for construction costs incurred). Complete this question by entering your answers in the tabs below.
Journal entry worksheet Record construction costs. Note: Enter debits before credits. Date General Journal Debit Credit 2021 Record entry Clear entry View general journal
Journal entry worksheet 4 Record progress billings. Note: Enter debits before credits. General Journal Debit Credit Date 2021 Record entry Clear entry View general journal Req 2A Req 2B>
Journal entry worksheet
View transaction list Journal entry worksheet Record gross profit (loss). Note: Enter debits before credits General Journal Debit Credit Date 2021 Record entry Clear entry View general journal Reg 2A Req 2B
Expert Solution
| 2021 | 2022 | 2023 | Total | |
| Costs incurred during the year | 2581000 | 2347000 | 3049200 | 7977200 |
| Cost incurred till date | 2581000 | 4928000 | 7977200 | |
| Estimated costs to complete | 6319000 | 2772000 | 0 | 9091000 |
| billings for the year | 2090000 | 2838000 | 5072000 | 10000000 |
| Cash collected during the year | 1845000 | 2900000 | 5255000 | 10000000 |
| % complete | =cost incurred to date/estimated total cost | |||
| =2581000/9091000 | =4928000/9091000 | =7977200/9091000 | ||
| 28.39% | 0.542075 | 0.877483 | ||
| Revenue recognised | % complete*contact price-revenue previously recognised | |||
| =((2581000/9091000)*10000000)-0 | =((4928000/9091000)*10000000)-2839072 | +10000000-2581674-2839072 | ||
| 2839072 | 2581674 | 4579254 | ||
| Total gross profit | =10000000-7977200 | |||
| 2022800 | ||||
| 2021 | ||||
| Construction in progress | 2581000 | |||
| To cash | 2581000 | |||
| Accounts receivable | 2090000 | |||
| To Progress billings | 2090000 | |||
| Cash | 1845000 | |||
| To accounts receivable | 1845000 | |||
| Gross profit | 258072 | |||
| Construction expense | 2581000 | |||
| To construction revenue | 2839072 | |||
| 2022 | ||||
| 2022 | ||||
| Construction in progress | 2347000 | |||
| To cash | 2347000 | |||
| Accounts receivable | 2838000 | |||
| To Progress billings | 2838000 | |||
| Cash | 2900000 | |||
| To accounts receivable | 2900000 | |||
| Gross profit | 234674 | |||
| Construction expense | 2347000 | |||
| To construction revenue | 2581674 | |||
| 2023 | ||||
| Construction in progress | 3049200 | |||
| To cash | 3049200 | |||
| Accounts receivable | 5072000 | |||
| To Progress billings | 5072000 | |||
| Cash | 5255000 | |||
| To accounts receivable | 5255000 | |||
| Gross profit | 1530054 | |||
| Construction expense | 3049200 | |||
| To construction revenue | 4579254 |
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