In 2021, 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 2023. Information related to the contract is as follows: 2021 2022 2023 Cost incurred during the year $2,581,000 $2,347,000 $3,049,200 Estimated costs to complete as of year-end 6,319,000 2,772,000 0 Billings during the year 2,090,000 2,838,000 5,072,000 Cash collections during the year 1,845,000 2,900,000 5,255,000 Westgate recognizes revenue over time according to percentage of completion. 2.b. In the journal below, complete the necessary journal entries for the year 2022 (credit "Various accounts" for construction costs incurred). Record gross profit (loss). Date General Journal Debit Credit 2022 _________________________ ___________ __________ _________________________ ___________ __________ _________________________ ___________ ___________ ________________________

In 2021, 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 2023. Information related to the contract is as follows: 2021 2022 2023 Cost incurred during the year $2,581,000 $2,347,000 $3,049,200 Estimated costs to complete as of year-end 6,319,000 2,772,000 0 Billings during the year 2,090,000 2,838,000 5,072,000 Cash collections during the year 1,845,000 2,900,000 5,255,000 Westgate recognizes revenue over time according to percentage of completion. 2.b. In the journal below, complete the necessary journal entries for the year 2022 (credit "Various accounts" for construction costs incurred). Record gross profit (loss). Date General Journal Debit Credit 2022 _________________________ ___________ __________ _________________________ ___________ __________ _________________________ ___________ ___________ ________________________

In 2021, 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 2023. Information related to the contract is as follows: 2021 2022 2023 Cost incurred during the year $2,581,000 $2,347,000 $3,049,200 Estimated costs to complete as of year-end 6,319,000 2,772,000 0 Billings during the year 2,090,000 2,838,000 5,072,000 Cash collections during the year 1,845,000 2,900,000 5,255,000 Westgate recognizes revenue over time according to percentage of completion. 2.b. In the journal below, complete the necessary journal entries for the year 2022 (credit "Various accounts" for construction costs incurred). Record gross profit (loss). Date General Journal Debit Credit 2022 ___________________ _ _____________ _ _____________ _ _ __________________

CONCEPTS IN FED.TAX.,2020-W/ACCESS

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter3: Income Sources

Section: Chapter Questions

Problem 88P

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In 2021, 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 2023. Information related to the contract is as follows:

2021 2022 2023

Cost incurred during the year $2,581,000 $2,347,000 $3,049,200

Estimated costs to complete as of year-end 6,319,000 2,772,000 0

Billings during the year 2,090,000 2,838,000 5,072,000

Cash collections during the year 1,845,000 2,900,000 5,255,000

Westgate recognizes revenue over time according to percentage of completion.

2.b. In the journal below, complete the necessary journal entries for the year 2022 (credit "Various accounts" for construction costs incurred).

Record gross profit (loss).

Date General Journal Debit Credit

2022 _________________________ ___________ __________

_________________________ ___________ __________

_________________________ ___________ ___________

_________________________ ___________ ___________

_________________________ ____________ ___________

_________________________ ____________ ___________

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In 2021, 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 2023. Information related to the contract is as follows: 2021                      2022                   2023 Cost incurred during the year                                       $2,581,000              $2,347,000             $3,049,200 Estimated costs to complete as of year-end               6,319,000                2,772,000                              0 Billings during the year                                                    2,090,000                 2,838,000               5,072,000 Cash collections during the year                                    1,845,000                 2,900,000               5,255,000    Westgate recognizes revenue over time according to percentage of completion. 2.a. In the journal below,…
In 2021, 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 2023. Information related to the contract is as follows: 2021                      2022                   2023 Cost incurred during the year                                       $2,581,000              $2,347,000             $3,049,200 Estimated costs to complete as of year-end               6,319,000                2,772,000                              0 Billings during the year                                                    2,090,000                 2,838,000               5,072,000 Cash collections during the year                                    1,845,000                 2,900,000               5,255,000    Westgate recognizes revenue over time according to percentage of completion. 2-a. In the journal below, complete the…
In 2021, 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 2023. Information related to the contract is as follows: 2021                      2022                   2023 Cost incurred during the year                                       $2,581,000              $2,347,000             $3,049,200 Estimated costs to complete as of year-end               6,319,000                2,772,000                              0 Billings during the year                                                    2,090,000                 2,838,000               5,072,000 Cash collections during the year                                    1,845,000                 2,900,000               5,255,000    Westgate recognizes revenue over time according to percentage of completion. 2-a. In the journal below, complete the…
In 2021, 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 2023. Information related to the contract is as follows:                                                                                                 2021                      2022                   2023 Cost incurred during the year                                       $2,581,000              $2,347,000             $3,049,200 Estimated costs to complete as of year-end                6,319,000                 2,772,000                              0 Billings during the year                                                    2,090,000                 2,838,000               5,072,000 Cash collections during the year                                    1,845,000                 2,900,000               5,255,000 Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years assuming the…
In 2021, 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 2023. Information related to the contract is as follows: 2021                      2022                   2023 Cost incurred during the year                                       $2,581,000              $2,347,000             $3,049,200 Estimated costs to complete as of year-end               6,319,000                2,772,000                              0 Billings during the year                                                    2,090,000                 2,838,000               5,072,000 Cash collections during the year                                    1,845,000                 2,900,000               5,255,000    Westgate recognizes revenue over time according to percentage of completion. Required: 1.Calculate the amount of…
In 2021, 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 2023. Information related to the contract is as follows: 2021                      2022                   2023 Cost incurred during the year                                       $2,581,000              $2,347,000             $3,049,200 Estimated costs to complete as of year-end               6,319,000                2,772,000                              0 Billings during the year                                                    2,090,000                 2,838,000               5,072,000 Cash collections during the year                                    1,845,000                 2,900,000               5,255,000    Westgate recognizes revenue over time according to percentage of completion. Record cash collections.
In 2021, 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 2023. Information related to the contract is as follows: 2021 2022 2023 Cost incurred during the year $2,581,000 $2,347,000 $3,049,200 Estimated costs to complete as of year-end 6,319,000 2,772,000 0 Billings during the year 2,090,000 2,838,000 5,072,000 Cash collections during the year 1,845,000 2,900,000 5,255,000 Westgate recognizes revenue over time according to percentage of completion. 4.Calculate the amount of revenue and…
In 2021, 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 2023. Information related to the contract is as follows: 2021 2022 2023 Cost incurred during the year $2,581,000 $2,347,000 $3,049,200 Estimated costs to complete as of year-end 6,319,000 2,772,000 0 Billings during the year 2,090,000 2,838,000 5,072,000 Cash collections during the year 1,845,000 2,900,000 5,255,000 Westgate recognizes revenue over time according to percentage of completion. complete the…
In 2021, 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 2023. Information related to the contract is as follows: 2021 2022 2023 Cost incurred during the year $ 2,079,000 $ 3,465,000 $ 2,371,600 Estimated costs to complete as of year-end 5,621,000 2,156,000 0 Billings during the year 1,700,000 3,844,000 4,456,000 Cash collections during the year 1,500,000 3,300,000 5,200,000 Assume that Westgate Construction’s contract with Santa Clara County does not qualify for revenue recognition over time.Required:1. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years.2-a. In the journal below, complete the necessary journal entries for the year 2021 (credit "Various accounts" for construction costs incurred).2-b. In the journal below, complete the necessary journal entries…
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