In 2013, the Westgate Construction Company entered into a contract to construct
ID: 2748963 • Letter: I
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:
Westgate uses the percentage-of-completion method of accounting for long-term construction contracts.
1.
Calculate the amount of gross profit (loss) to be recognized in each of the three years. (Do not round intermediate calculations. (2013, 2014, 2015???)
2.1
In the journal below, complete the necessary journal entries for the year 2013 (credit various accountsfor 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.
Journal Entry Worksheet
1. Record constraction cost?
2. Record progress billings
3. Cash collection
4. Gross Profit
2.2
In the journal below, complete the necessary journal entries for the year 2014 (credit various accountsfor 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.)
Journal Entry Worksheet
1. Record constraction cost?
2. Record progress billings
3. Cash collection
4. Gross Profit
2.3
In the journal below, complete the necessary journal entries for the year 2015 (credit various accountsfor 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.) ( the same 1-4???)
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.) (current asset 2013, 2014)
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:
2013 2014 2015 Cost incurred during the year $ 2,856,000 $ 3,780,000 $ 1,940,400 Estimated costs to complete as of year-end 5,544,000 1,764,000 0 Billings during the year 2,400,000 4,236,000 3,364,000 Cash collections during the year 2,160,000 4,000,000 3,840,000Explanation / Answer
Answer:1
Answer:2.1 Journal entries for the year 2013
1 Construction in progress A/C Dr, $2,856,000
To Various accounts $2,856,000
2 Accounts Receivable A/C Dr. $ 2,400,000
To Billings on construction contract A/C $ 2,400,000
3 Cash A/C Dr. $2,160,000
To Accounts receivable A/C $2,160,000
4 Construction in progress A/C Dr. $544000
Cost of Construction A/C Dr. $2,856,000
To Revenue from long-term contracts A/C $3400000
Answer:2.2 journal entries for the year 2014
1 Construction in progress A/C Dr, $3,780,000
To Various accounts $3,780,000
2 Accounts Receivable A/C Dr. $4,236,000
To Billings on construction contract A/C $4,236,000
3 Cash A/C Dr. $4000,000
To Accounts receivable A/C $4000,000
4 Construction in progress A/C Dr. $720000
Cost of Construction A/C Dr. $3,780,000
To Revenue from long-term contracts A/C $4500000
Answer:2.3 journal entries for the year 2015
1 Construction in progress A/C Dr, $1,940,400
To Various accounts $1,940,400
2 Accounts Receivable A/C Dr. $3,364,000
To Billings on construction contract A/C $3,364,000
3 Cash A/C Dr. $3,840,000
To Accounts receivable A/C $3,840,000
4 Construction in progress A/C Dr. $159600
Cost of Construction A/C Dr. $1,940,400
To Revenue from long-term contracts A/C $2100000
Answer:3
Answer:4
Answer:5
Particulars 2013 2014 2015 Cost incurred to date (A) 2856000 6636000 8576400 + Estimated costs to complete as of year-end 5544000 1764000 0 Estimated total costs (B) 8400000 8400000 8576400 % of completion (A/B)*100 34 79 100 Revenue to be recognised 3400000 7900000 10000000 Less: Revenue already recognised 0 3400000 7900000 - Cost incurred 2856000 3780000 1940400 Gross profit 544000 720000 159600Related Questions
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