Question

in 2018, 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 2020. Information related to the contract is as follows:

	2018			2019			2020
Cost incurred during the year	$	2,100,000		$	2,450,000		$	2,695,000
Estimated costs to complete as of year-end		4,900,000			2,450,000			0
Billings during the year		2,200,000			2,350,000			5,450,000
Cash collections during the year		1,900,000			2,300,000			5,800,000

Westgate recognizes revenue over time according to percentage of completion.

rev: 09_15_2017_QC_CS-99734

2-a. In the journal below, complete the necessary journal entries for the year 2018 (credit "Various accounts" for construction costs incurred).
2-b. In the journal below, complete the necessary journal entries for the year 2019 (credit "Various accounts" for construction costs incurred).
2-c. In the journal below, complete the necessary journal entries for the year 2020 (credit "Various accounts" for construction costs incurred).

Answer 1

Solution 2019 2020 IS. No 2018 Porticular) a Contract Price 10.000.000 10.000,000 10,000,000 0 cost incurred during the yo. 2,100,000 2,450,000 | 2,695,000 (c) Cost to date 12,100,000 4,550,000 7,245,000 (d) | Estimated cost to complete 4,900,000 | 2050, VOL O le) Total Estimated cost 7,000,000 7,000,000 7,245.000 (c+d) (6) Percentage of completion | 30% 1 65% 100% (alexiso)_ 19) Revenue to date (axf)| 3000,000 6.500.000 - Revenue of Prev. Ye. I (3,000,000 I Rovence from this year 3000 oop | 3,500,000 10,000,000 (6500 000 3,500 cod In Cross Profit for this yeus 900,000 1,050,000 805,000 10 Billing during the year 12,200,000 2,350,000 5,450,000 - w cash collection during 14,900,000 2,300,000 5800000 I I the year Searned the CamScanner

Debit ($) Credit Date Accounty title 2018 2,100,000 construction in Progress (CIP) Accounts Payable (ALP) (Being cost incurred for the year) 2,100,000 2018 Accounts Receivable (AIR) 2,200,000 Billing on CIP | 3,200,000 |(Being billing done to the client ), 1,900,000 2018 I Cash - Al Receivable 1,900,000 2018 I CIP Construction Construction 900,000 2,100,000 Expenses Revenue 3,00,000 2019 CIP 2,450,000 Al Payable 2,450,000 2019 2,350,000 - Al Receivable Billing on CIP 2,350,000 2019 Cash Al Receivable 2,300,000 | 2,300,000 2019 CIP 1. Construction Exponnes Scammed Construction Revenue 1,050,000 2,450,000 | 3.500.000 port

2020 CIP 2,695,000 - Alpayable | 2,695,000 5,450,000 2020 L A Receivable Billing on CIP m CIP 5,450,000 2020 I 5,800,000 Cash - Al Receivable 5.800.000 2020 CIP I construction Expenses Construction Revenue 805,000 2,695,000 3.500,00u 2020 Billing on CIP 10,000 000 10,000 000 ( Being and accounts written off) Scanned with team Scanner