In 2018, the Westgate Construction Company entered into a contract to construct a road for Santa...
Free
90.2K
Verified Solution
Link Copied!
Question
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:
201820192020Cost incurred during the year2,400,0003,600,0002,200,000Estimated costs to complete as of year-end5,600,0002,000,0000Billings during the year2,000,0004,000,0004,000,000Cash collections during the year1,800,0003,600,0004,600,000
Westgate recognizes revenue over time according to percentageof completion.
3. Complete the information required below to prepare apartial balance sheet for 2018 and 2019 showing any items relatedto the contract. (Do not round intermediate calculations.)
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 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 percentageof completion.
3. Complete the information required below to prepare apartial balance sheet for 2018 and 2019 showing any items relatedto the contract. (Do not round intermediate calculations.)
Answer & Explanation Solved by verified expert
3.9 Ratings (356 Votes)
| Balance Sheet (Partial) | 2018 | 2019 | |||
| Current Assets: | |||||
| Accounts receivable | $ 2,00,000 | $ 6,00,000 | |||
| Construction in progress | $ 30,00,000 | $ 75,00,000 | |||
| Less: Billings | $ -20,00,000 | $ -60,00,000 | |||
| Cost in excess of billings | $ 10,00,000 | $ 15,00,000 | |||
| Current Liabilities: | |||||
| Working Notes: | 2018 | 2019 | |||
| Cost incurred during the year | $ 24,00,000 | $ 36,00,000 | |||
| Add: | Cost incurred in previous year | $ 24,00,000 | |||
| Cost incurred till date (i) | $ 24,00,000 | $ 60,00,000 | |||
| Add: | Estimated cost to complete | $ 56,00,000 | $ 20,00,000 | ||
| Total cost (ii) | $ 80,00,000 | $ 80,00,000 | |||
| Percentage Completed [(iii) = (i) / (ii)] | 30% | 75% | |||
| Construction in progress [$10000000 X (iii)] | $ 30,00,000 | $ 75,00,000 | |||
| Billings during the year | $ 20,00,000 | $ 40,00,000 | |||
| Less: | Cash collections during the year | $ 18,00,000 | $ 36,00,000 | ||
| Accounts Receivable | $ 2,00,000 | $ 4,00,000 | |||
| Add: | Previous year balance | $ 2,00,000 | |||
| Total Accounts receivables | $ 2,00,000 | $ 6,00,000 | |||
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
- Unlimited Question Access with detailed Answers
- Zin AI - 3 Million Words
- 10 Dall-E 3 Images
- 20 Plot Generations
- Conversation with Dialogue Memory
- No Ads, Ever!
- Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Other questions asked by students
StudyZin's Question Purchase
1 Answer
$0.99
(Save $1 )
One time Pay
- No Ads
- Answer to 1 Question
- Get free Zin AI - 50 Thousand Words per Month
Best
Unlimited
$4.99*
(Save $5 )
Billed Monthly
- No Ads
- Answers to Unlimited Questions
- Get free Zin AI - 3 Million Words per Month
*First month only
Free
$0
- Get this answer for free!
- Sign up now to unlock the answer instantly
You can see the logs in the Dashboard.