In 2013, the Westgate Construction Company entered into a contract to construct

Question

In 2013, 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 2015. Information related to the contract is as follows:

    

    

  

1.

Calculate the amount of gross profit (loss) to be recognized in each of the three years. (Do not round intermediate calculations.)

     

2.1

In the journal below, complete the necessary journal entries for the year 2013 (credit various accounts for construction costs incurred). (If no entry is required for a particular transaction, select "No journal entry required" in the first account field. Do not round intermediate calculations.)

       

2.2

In the journal below, complete the necessary journal entries for the year 2014 (credit various accounts for construction costs incurred). (If no entry is required for a particular transaction, select "No journal entry required" in the first account field. Do not round intermediate calculations.)

           

2.3

In the journal below, complete the necessary journal entries for the year 2015 (credit various accounts for construction costs incurred). (If no entry is required for a particular transaction, select "No journal entry required" in the first account field. Do not round intermediate calculations.)

       

3.

Complete the information required below to prepare a partial balance sheet for 2013 and 2014 showing any items related to the contract. (Do not round intermediate calculations.)

      

4.

Calculate the amount of 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.)

  

  

   

Calculate the amount of 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.)

  

  

In 2013, 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 2015. Information related to the contract is as follows:

Explanation / Answer

Answer to the question No 1:

                                     Based on Percentage-of-completion method of accounting

2013 2014 2015 Cost incurred during the year 19,76,000 34,20,000 24,24,400 Cost incurred to date (Cost incurred in previous year - Cost incurred during the year) 19,76,000 53,96,000 78,20,400 Estimated costs to complete as of year-end 56,24,000 22,04,000 0 Estimated total costs = Cost incurred to date + Estimated costs to complete as of year-end 76,00,000 76,00,000 78,20,400 % of completion = Cost incurred to date/Estimated total costs 26% 71% 100% Revenue to be recognised to date 26,00,000 71,00,000 1,00,00,000 Revenue recognised in previous year 0 26,00,000 71,00,000 Revenue recognised during the year = Revenue to be recognised to date - Revenue recognised in previous year 26,00,000 45,00,000 29,00,000 Gross profit = Revenue recognised during the year - Cost incurred during the year 6,24,000 10,80,000 4,75,600

Related Questions

Navigate

• Browse (All)
• Browse I
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.