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In 2013, 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 2015. Information related to the contract is as follows:

2013 2014 2015
Cost incurred during the year $ 2,291,000 $ 3,555,000 $ 2,259,400
Estimated costs to complete as of year-end 5,609,000 2,054,000 0
Billings during the year 1,900,000 3,946,000 4,154,000
Cash collections during the year 1,710,000 3,500,000 4,790,000

Westgate uses the percentage-of-completion method of accounting for long-term construction contracts.

Required:

1. find out the amount of gross profit (loss) to be recognized in each of the three years. (Do not round intermediate calculations.)

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M947692

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