Prepare the journal entry using revenue recognition.
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Prepare the
During 2023, one of our construction customers asked us to do something we haven’t done before. In addition to building an apartment building, they asked us to cover the building maintenance on a separate building over a period of two years. We agreed as this helped us gain the construction portion of the contract. Construction of the building was finished by the end of the fiscal year, but the two-year maintenance contract extends to the end of June 2025. The total value of the contract was $850,000 and WC’s management estimates that a similar maintenance contract would be sold for approximately $110,000 and the standalone construction would have been $740,000. We have done separate maintenance contracts as a standalone service in the past. As of now, the full $850,000 is recorded as revenue for the 2023 fiscal year.
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- 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 Assume that Westgate Construction's contract with Santa Clara County does not qualify for revenue recognition over time. Required: 1. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years. 2-a. In the journal below, complete the necessary journal entries for the year 2024 (credit "Cash, Materials, etc." for construction costs incurred). 2024 $ 2,739,000 5,561,000 2,300,000 2,100,000 Cost incurred during the year Estimated costs to complete as of year-end 2025 $ 3,735,000 1,826,000 4,174,000 3,900,000 2024 $ 2,430,000 5,630,000 2-b. In the journal below, complete the necessary journal entries for the year…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. Revenue Gross profit (loss) Required: 1. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years. Note: Do not round intermediate calculations. Loss amounts should be indicated with a minus sign. Answer is complete and correct. 2024 $ 2,400,000 5,600,000 2,000,000 1,800,000 2024 $ 3,000,000 $ $ 600,000 $ 2025 2026 4,500,000 $ 2,500,000 900,000 $ 300,000 2025 $ 3,600,000 2,000,000 4,000,000 3,600,000 2026 $ 2,200,000 0 4,000,000 4,600,000On December 1, 2020, Shyam Construction Co. entered into a contract with a customer for the construction of a building. The contract prices are $44,00,000, which is to be billed to the customers periodically based on Shyam's progress on the construction. The estimated total contract cost is $28,00,000. The actual costs incurred in 2020 amounts to $12,00,000. Requirement: The revenue to be recognized in 2020
- In 2018, the Laguna Inc entered into a contract to construct a road for 5th Avenue for $14,000,000. The road was completed in 2018. Information related to the contract is as follows: Laguna uses the percentage-of-completion method of accounting for long-term construction contracts. Required: Calculate the amount of gross profit to be recognized in each of the three years. Prepare all necessary journal entries for each of the years (credit various accounts for construction costs incurred). Prepare a partial balance sheet for 2016 and 2017 showing any items related to the contract.In 2018, the Laguna Inc entered into a contract to construct a road for 5th Avenue for $14,000,000. The road was completed in 2018. Information related to the contract is as follows: Laguna uses the completed contract method of accounting for long-term construction contracts. Calculate the amount of gross profit to be recognized in each of the three years. Prepare all necessary journal entries for each of the years (credit various accounts for construction costs incurred). Prepare a partial balance sheet for 2016 and 2017 showing any items related to the contract.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 Cost incurred during the year Estimated costs to complete as of year-end Billings during the year Cash collections during the year Assume that Westgate Construction's contract with Santa Clara County does not qualify for revenue recognition over time. Required: 1. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years. 2-a. In the journal below, complete the necessary journal entries for the year 2024 (credit "Cash, Materials, etc." for construction costs incurred). 2-b. In the journal below, complete the necessary journal entries for the year 2025 (credit "Cash, Materials, etc." for construction costs incurred). Cost incurred during the year. Estimated costs to complete as of year-end 2-c. In the journal below, complete the necessary journal entries for the year 2026 (credit "Cash,…
- Tamra, Inc. began work on a $ 7000,000 contract in 2019 to construct an office building. During 2010, Tamra, Inc. incurred costs of $1,700,00, billed their customers for $1,200,000, and collected $960,000. At December 31,2019, the estimated future costs to complete the project total $3,300,000. Instructions: compute Tamra’s Gross profit to be recognized in 2019?On December 1, 2020, Shyam Construction Co. entered into a contract with a customer for the construction of a building. The contract prices are $44,00,000, which is to be billed to the customers periodically based on Shyam's progress on the construction. The estimated total contract cost is $28,00,000. The actual costs incurred in 2020 amounts to $12,00,000. Requirement: The revenue to be recognized in 2020 BIU N EIn January, 2022, Harmony Inc. has the following expenditures related to manufacturing a new generation of its product. Match each expenditure to the appropriate accounting treatment on the right. Takes possession of a manufacturing machine. The vendor sends an invoice for $650,000. Pays a machine import duty of $35,000 to the government. Pays employees $75,000 for research and development to finalize the new product design. Receives an invoice for $4,250 from the company that shipped the machine. Pays employees $16,500 to install, customize, and test the new manufacturing machine. Pays…
- 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 Costs incurred during the year Estimated costs to complete as of year-end Westgate recognizes revenue over time according to percentage of completion. Revenue Gross profit (loss) 2022 2021 $2,184,000 $3,510,000 5,616,000 2,106,000 2021 2,120,000 1,860,000 2022 . Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years assuming the following costs curred and costs to complete information. (Do not round intermediate calculations and round your final answers to the nearest hole dollar amount. Loss amounts should be indicated with a minus sign.) 2021 $2,184,000 5,616,000 2023 2023 $2,316,600 3,574,000 4,306,000…In 2018, the Laguna Inc entered into a contract to construct a road for 5th Avenue for $14,000,000. The road was completed in 2018. Information related to the contract is as follows: 1. Calculate the amount of gross profit to be recognized in each of the three years under percentage-of-completion method of accounting for long-term construction contracts. 2. Calculate the amount of gross profit to be recognized in each of the three years under completed contract method of accounting for long-term construction contracts.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. Complete this question by entering your answers in the tabs below. Req 2A Problem 6-10 (Algo) Part 2 2-a. In the journal below, complete the necessary Journal entries for the year 2024 (credit "Cash, Materials, etc." for construction costs Incurred). View transaction list 2-b. In the journal below, complete the necessary Journal entries for the year 2025 (credit "Cash, Materials, etc." for construction costs Incurred). 2-c. In the journal below, complete the necessary Journal entries for the year 2026 (credit "Cash, Materials, etc." for construction costs Incurred). Journal…
