Required information [The following information applies to the questions display

Question

Required information [The following information applies to the questions displayed below. In 2018, 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 2020 Information related to the contract is as follows 2020 Cost incurred during the year Estimated costs to complete as of year-end Billings during the year Cash collections during the year 2019 $2,291,000 3,555, 000 $2,259,400 2,054,000 2,110,000 3,736,000 4,154,obo 3,500,000 2018 5,609,000 1,855,000 4,645,000 Westgate recognizes revenue over time according to percentage of completion Requirec 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.) 2018 2019 2020 Revenue Gross profit (loss)

Explanation / Answer

The accountig should be as per IAS 11.

Particulars 2018 2019 2020 Cost incurred to date 2291000 5846000 8105400 Cumulative cost Cost to complete 5609000 2054000 0 Estimated total cost 7902018 7902019 8107420 Cumulative cost incurred to date + Cost to complete % Completion 28.99 73.98 99.98 Cost incurred to date/Estimated Total Cost X 100 Revenue 2899259 7398109 10000000 Distributed as per % completion (-) Cost incurred to date 2291000 5846000 8105400 From above Gross Profit 608259.4 1552109 1894600

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