Intermediate Accounting
1st Edition
ISBN: 9780132162302
Author: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
Publisher: PEARSON
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Chapter 11, Problem 2JC
To determine
The method which is used to amortized the cost of the licenses by the R.
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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:
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)
2021
2022
$2,610,000 $3,162,000
6,390,000 2,028,000
2,100,000
1,850,000
2021
2022
Required:
1. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years. (Do not round intermediate
calculations. Loss amounts should be indicated with a minus sign.)
2023
$2,230,800
2023
0
3,672,000 4,228,000
5,150,000
3,000,000
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…
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:
Current liabilities:
2024
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.
0
2024
$ 2,523,000
6,177,000
2,070,000
1,835,000
0
2025
$ 3,177,000
1,800,000
3,630,000
3,400,000
2025
0
2026
$ 1,980,000
0
0
4,300,000
4,765,000
Chapter 11 Solutions
Intermediate Accounting
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