Homework_Chapter_5B-P4 - Question 1 Score 50/50 Your...

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Unformatted text preview: Question 1: Score 50/50 Your response P 5-4 Percentage-of-completion method LO4 In 2006, 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 2008. Information related to the contract is as follows: 2006 2007 2008 Cost incurred during the year $ 2,400,000 $ 3,600,000 $ 2,200,000 Estimated costs to complete as of year-end 5,600,000 2,000,000 0 Billings during the year 2,000,000 4,000,000 4,000,000 Cash collections during the year 1,800,000 3,600,000 4,600,000 Westgate uses the percentage-of-completion method of accounting for long-term construction contracts. Required: 1. Calculate the amount of gross profit to be recognized in each of the three years. 2. In the journal below, complete the necessary journal entries for each of the years (credit various accounts for construction costs incurred). 3. Complete the information required below to prepare a partial balance sheet for 2006 and 2007 showing any...
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Homework_Chapter_5B-P4 - Question 1 Score 50/50 Your...

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