Question

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: 2023 $2,259,400 Cost incurred during the year Estimated costs to complete as of year-end Billings during the year Cash collections during the year 2021 $2,291,000 5,609,000 2,110,000 1,855,000 2022 $3,555,000 2,054,000 3,736,000 3,500,000 4,154,000 4,645,000 Westgate recognizes revenue over time according to percentage of completion. 3. Complete the information required below to prepare a partial balance sheet for 2021 and 2022 showing any items related to the contract. (Do not round intermediate calculations.) 2021 2022 Balance Sheet (Partial) Current assets: Current liabilities:

Answer 1

Balance Sheet (Partial)	2021		2022
Current Assets:
Accounts Receivable		255,000		491,000
Construction in progress	2,899,258		7,393,106
Less: Billings	2,110,000		5,846,000
Costs and profit in excess of billings		789,258		1,547,106
Current Liabilities:
Working	2021	2022
Cost incurred (cummulative)	2,291,000	5,846,000
Estimated costs to complete	5,609,000	2,054,000
Total Cost	7,902,021	7,902,022
Contract price	10,000,000	10,000,000
Profit	2,097,979	2,097,978
Percentage of completion =	28.99%	73.98%
(2,291,000/7,902,021)
Profit to be recognized	608,258	943,848
Balance Sheet (Partial)	2021		2022
Current Assets:
Accounts Receivable		2,110,000-1,855,000		(3,736,000-3,500,000)+(2,110,000-1,855,000)
Construction in progress	2,291,000 + 608,258		(3,550,000 + 943,848) + (2,291,000 + 608,258)
Less: Billings	2,110,000		2,110,000 + 3,736,000
Costs and profit in excess of billings
Current Liabilities: