+1-415-670-9189
info@expertsmind.com
Calculate the amount of gross profit
Course:- Accounting Basics
Reference No.:- EM131677705




Assignment Help
Assignment Help >> Accounting Basics

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:

 

2013

2014

2015

Cost incurred during the year

$1,584,000

$3,240,000

$2,613,600

Estimated costs to complete as of year-end

5,616,000

2,376,000

0

Billings during the year

1,200,000

3,624,000

5,176,000

Cash collections during the year

1,080,000

2,800,000

6,120,000

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

Required:

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).




Put your comment
 
Minimize


Ask Question & Get Answers from Experts
Browse some more (Accounting Basics) Materials
ACFI3005 Auditing and Assurance Assignment. Calculate the planning materiality and provide two reasons justifying the base you have chosen for your calculation. Refer to addi
How do supply, demand, and price controls interact to affect farm production in Columbia and Afghanistan? How does the illicit nature of drug imports from Columbia and Afghani
A company buys a machine for $61,700 on January 1, 2010. The maintenance costs for the years 2010-2013 are as follows: 2010, $4,900; 2011, $4,700; 2012, $12,400 (includes $7
Which of the following is not one of the reasons that auditors provide only reasonable assurance on the financial statements? Tort actions against CPAs are more common than br
As part of the study underlying Example 1, each customer took a test that measures willingness to believe claims, producing a numerical score called Gullible. If the custome
Compare and contrast the WACC to this basic accounting equation. does the WACC contain a profit component? how does the WACC relate to the discount rate used in a net present
On August 1, 2007, a company issues bonds with a par value of $600,000. The bonds mature in 10 years, and pay 6% annual interest, payable each February 1 and August 1.
Gil makes out a $900 negotiable promissory note payable to Ben. By special indorsement, Ben transfers the note for value to Jess. By blank indorsement, Jess transfers the note