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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.
|
|
2021 |
2022 |
2023 |
|
Cost incurred during the year |
$2,523,000 |
$3,177,000 |
$1,980,000 |
|
Estimated costs to complete as of year-end |
6,177,000 |
1,800,000 |
0 |
|
Billings during the year |
2,070,000 |
3,630,000 |
4,300,000 |
|
Cash collections during the year |
1,835,000 |
3,400, 000 |
4,765,000 |
Westgate recognizes revenue over time according to percentage of completion.
Required:
1. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years (Do not round intermediate calculations. Loss amounts should be indicated with a minus sign.)
|
|
2021 |
2022 |
2023 |
|
Revenue |
$2,523,000 |
|
|
|
Gross profit (loss) |
$6,177,000 |
|
|
Expert Solution
PFA
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