In 2018, the Westgate Construction Company entered into a contract to construct a road for Santa...

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Accounting

In 2018, the Westgate Construction Company entered into acontract to construct a road for Santa Clara County for$10,000,000. The road was completed in 2020. Information related tothe contract is as follows: 2018 2019 2020 Cost incurred during theyear $ 2,604,000 $ 4,032,000 $ 1,940,400 Estimated costs tocomplete as of year-end 5,796,000 1,764,000 0 Billings during theyear 2,040,000 4,596,000 3,364,000 Cash collections during the year1,820,000 4,000,000 4,180,000 Westgate recognizes revenue over timeaccording to percentage of completion. Required: 1. Calculate theamount of revenue and gross profit (loss) to be recognized in eachof the three years. 2-a. In the journal below, complete thenecessary journal entries for the year 2018 (credit "Variousaccounts" for construction costs incurred). 2-b. In the journalbelow, complete the necessary journal entries for the year 2019(credit "Various accounts" for construction costs incurred). 2-c.In the journal below, complete the necessary journal entries forthe year 2020 (credit "Various accounts" for construction costsincurred). 3. Complete the information required below to prepare apartial balance sheet for 2018 and 2019 showing any items relatedto the contract. 4. Calculate the amount of revenue and grossprofit (loss) to be recognized in each of the three years assumingthe following costs incurred and costs to complete information.2018 2019 2020 Cost incurred during the year $ 2,604,000 $3,820,000 $ 3,220,000 Estimated costs to complete as of year-end5,796,000 3,120,000 0 5. Calculate the amount of revenue and grossprofit (loss) to be recognized in each of the three years assumingthe following costs incurred and costs to complete information.2018 2019 2020 Cost incurred during the year $ 2,604,000 $3,820,000 $ 3,960,000 Estimated costs to complete as of year-end5,796,000 4,140,000 0

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1 2018 2019 2020 CONTRACT PRICE 10000000 10000000 10000000 ACTUAL COSTS TO DATE 2604000 6636000 8576400 ESTIMATED COST TO COMPLETE 5796000 1764000 TOTAL ESTIMATED COSTS 8400000 8400000 8576400 ESTIMATED GROSS PROFITLOSS RECOGNISITION 1600000 1600000 1423600 ACTUAL IN 2020 NOTE ACTUAL COSTS TO DATE 2018 2604000 2019 26040004032000 2020 66360001940400 REVENUE RECOGNISITION ACTUAL COSTS TO DATE TOTAL ESTIMATED COSTS CONTRACT PRICE 2018 2604000840000010000000 3100000 2019 66360008400000100000003100000 4800000 2020 1000000031000004800000 2100000 GROSS PROFITLOSS RECOGNISITION REVENUEACTUAL COST 2018 31000002604000 496000 2019 48000004032000 768000 2020 TOTAL GROSS PROFIT RECOGNIZED ON PROJECT 1423600 LESS GROSS PROFIT RECOGNIZED IN    See Answer
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