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Calculate amount of revenue and gross profit to recognized

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Reference no: EM132708826

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:

                                                            2021               2022                   2023

Cost incurred during the year     $2,400,000         $3,600,000     $2,200,000
Estimated costs to complete-       5,600,000         2,000,000            0
as of year-end
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

Assume that Westgate Construction's contract with Santa Clara County does not qualify for revenue recognition over time.

Problem 1. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years.

Reference no: EM132708826

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