Question

U solo. Il does not indicate Required information [The following information applies to the questions displayed 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: 2023 $2,238,800 Cost incurred during the year Estimated costs to complete as of year-end Billings during the year Cash collections during the year 2021 $2,619,000 6,390,000 2,100,000 1,850,000 2022 $3,162,000 2,028,000 3,672,000 3,000,000 4,228,000 5,150,000 Westgate recognizes revenue over time according to percentage of completion, . In the journal below, complete the necessary journal entries for the year 2021 (credit "Various accounts for construction cos curred) < Prev 3 4 5 6 of 8 ft Next >

Answer 1

Ansour Page: No © 20,36621 Particular 2021 2022 2023 10,000,000 10,000,000 10,000 poo 2610,000 3162000 2030,800 2610,000 5772000 8002800 6390,000 2028,000 9000,000 7800,000 8002800 Contract price cost incurred during the year cost incurred to date Estimated cool to complete Estimated total cost Percentage complete Revenue to be recognized Gross profite /100) Billings during the year cost collechons dering this year. 294 747 100%. 2900,000 4500,000 2600,000 290,000 1338000 369200 2100,000 3670000 4228000 1850,000 3000,000 5150,000 2001 O % complete s. 2610,000 9000,000 - X100 = 29%

Revenue Page No ③ to be recognized = 297. X 10,000,000 - $2900,000 000 Grous profit/(100) - 2900,000 - 2610,000 = $290,000 2012 % complete = 7800000 x100 5772000 = 74% Revenue to be recognized < (74% X10,000,000) – 2900,000 = $ 4500,000 Gross poolit kl oss) = 4500,000 - 3162000 = $1338000 2023 y complete..8002800X100 -100%. 8002800 Revenue to be recognized = (100. X10,000,000) - 2900,000-4500,000 $2600,000 Gross profit/ 11098) = 2600,000 - 2230800 = $369200

Page No ③ 2022 2023 202) Journal entries Debit | Credit Cip(work in procen) 2610,000 - Debit Credit Debit Credit 31620001 - - 3162000 costo incurred cash 2230800 -- - 230800 1 - 2610,000 Billing Accounts receivable 2100,000 Billing on CIP - - 2100,000 3672000 - - 4228000 3672000 - 4228000 Receiving 3000,000 1850000 5150,000 - cash pou payments Accounts receivable - 1850,000 - 3000,000 - 5150,000 2230800 - 3162000 - 1338000 369200 for revenue 4500,000 - 2600,000 Period end Constiveron expense 2610,000 - adjustments apfwerkin procent) 290,000 - Corom palitente construction revenue - 2900,000 completing the Billion on Cip I project c1P ( work in process) $19000,000 - f1000000