In 2021, the Westgate Construction Company entered into acontract to construct a road for Santa Clara County for$10,000,000. The road was completed in 2023. Information related tothe contract is as follows:
| 2021 | 2022 | 2023 |
| Cost incurred during the year | $ | 2,550,000 | | $ | 4,250,000 | | $ | 1,870,000 | |
| Estimated costs to complete as of year-end | | 5,950,000 | | | 1,700,000 | | | 0 | |
| Billings during the year | | 2,050,000 | | | 4,750,000 | | | 3,200,000 | |
| Cash collections during the year | | 1,825,000 | | | 4,100,000 | | | 4,075,000 | |
|
Westgate recognizes revenue over time according to percentage ofcompletion.
1. Calculate the amount of revenue and grossprofit (loss) to be recognized in each of the three years.
2021 2022 2023
Revenue ______ _______ ________
Gross P _______ _______ ________
2-a. In the journal below, complete thenecessary journal entries for the year 2021 (credit "Variousaccounts" for construction costs incurred).
2-b. In the journal below, complete the necessaryjournal entries for the year 2022 (credit "Various accounts" forconstruction costs incurred).
2-c. In the journal below, complete the necessaryjournal entries for the year 2023 (credit "Various accounts" forconstruction costs incurred).
3. Complete the information required below toprepare a partial balance sheet for 2021 and 2022 showing any itemsrelated to 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.
| 2021 | 2022 | 2023 |
| Costs incurred during the year | $ | 2,550,000 | | $ | 3,825,000 | | $ | 3,225,000 | |
| Estimated costs to complete as of year-end | | 5,950,000 | | | 3,125,000 | | | 0 | |
|
2021 2022 2023
Revenue ______ _______ ________
Gross P _______ _______ ________
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.
| 2021 | 2022 | 2023 |
| Costs incurred during the year | $ | 2,550,000 | | $ | 3,825,000 | | $ | 3,975,000 | |
| Estimated costs to complete as of year-end | | 5,950,000 | | | 4,150,000 | | | 0 | |
|
2021 2022 2023
Revenue ______ _______ ________
Gross P _______ _______ ________
