Calculate the amount of gross profit
Course:- Accounting Basics
Reference No.:- EM131677705

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Question - 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:





Cost incurred during the year




Estimated costs to complete as of year-end




Billings during the year




Cash collections during the year




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


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

2. In the journal below, complete the necessary journal entries for the year 2013 (credit various accounts for construction costs incurred).

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