In 2024, 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 2026. Information related to the contract is as follows: Cost incurred during the year Estimated costs to complete as of year-end Billings during the year Cash collections during the year Westgate recognizes revenue over time according to percentage of completion. Revenue Gross profit (loss) $ $ Required: 1. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years. Note: Do not round intermediate calculations. Loss amounts should be indicated with a minus sign. 2024 2,800,000 728,000 2024 $ 2,072,000 5,328,000 2,160,000 1,880,000 2025 2025 $ 2,738,000 2,590,000 2,650,000 2,700,000 2026 2026 $ 2,849,000 0 5,190,000 5,420,000

In 2024, 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 2026. Information related to the contract is as follows: Cost incurred during the year Estimated costs to complete as of year-end Billings during the year Cash collections during the year Westgate recognizes revenue over time according to percentage of completion. Revenue Gross profit (loss) $ $ Required: 1. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years. Note: Do not round intermediate calculations. Loss amounts should be indicated with a minus sign. 2024 2,800,000 728,000 2024 $ 2,072,000 5,328,000 2,160,000 1,880,000 2025 2025 $ 2,738,000 2,590,000 2,650,000 2,700,000 2026 2026 $ 2,849,000 0 5,190,000 5,420,000

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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Required information [The following information applies to the questions displayed below.] In 2024, 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 2026. Information related to the contract is as follows: Cost incurred during the year Estimated costs to complete as of year-end Billings during the year Cash collections during the year Westgate recognizes revenue over time according to percentage of completion. Balance Sheet (Partial) Current assets: Accounts receivable Construction in progress Less: Billings Cost of goods sold Current liabilities: Billings in excess of CIP 3. Complete the information required below to prepare a partial balance sheet for 2024 and 2025 showing any items related to the contract. Note: Do not round intermediate calculations. 2024 $ 0 2024 $ 2,184,000 5,616,000 2,120,000 1,860,000 0 2025 $ 3,510,000 2,106,000 3,574,000 3,400,000 0 2025 $ 0 0 2026 $ 2,316,600 0 0…
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