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In 2016, 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 2018. Information related to the contract is as follows:

	2016			2017			2018
Cost incurred during the year	$	2,400,000		$	3,600,000		$	2,200,000
Estimated costs to complete as of year-end		5,600,000			2,000,000			0
Billings during the year		2,000,000			4,000,000			4,000,000
Cash collections during the year		1,800,000			3,600,000			4,600,000

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.)

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2-a.		In the journal below, complete the necessary journal entries for the year 2016 (credit "Various accounts" for construction costs incurred). (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Answer & Explanation Solved by verified expert

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