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Elis [28]
2 years ago
9

In 2018, the Westgate Construction Company entered into a contract to construct a road for Santa Clara County for $10,000,000. T

he road was completed in 2020. Information related to the contract is as follows: 2018 2019 2020 Cost incurred during the year $ 2,184,000 $ 3,510,000 $ 2,316,600 Estimated costs to complete as of year-end 5,616,000 2,106,000 0 Billings during the year 1,800,000 3,894,000 4,306,000 Cash collections during the year 1,600,000 3,400,000 5,000,000 Westgate Construction uses the completed contract method of accounting for long-term construction contracts. Required: 1. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years.
Business
1 answer:
Zepler [3.9K]2 years ago
8 0

Answer:

revenue recognized

2018 = $2,800,000

2019 = $4,500,000

2020 = $2,700,000

gross profit

2018 = $616,000

2019 = $990,000

2020 = $383,400

Explanation:

Percentage of                      2018              2019               2020

completion method

Cost incurred in                   $0          $2,184,000    $5,694,000

previous year

+ Cost incurred              $2,184,000 $3,510,000    $2,316,600

during the year

Total cost incurred        $2,184,000 $5,694,000    $8,010,600

+ Estimated cost to       $5,616,000  $2,106,000            $0

be incurred

Total estimated cost    $7,800,000 $7,800,000     $8,010,600

to be incurred

Percentage of                   28%               73%                  100%

completion

 

Total revenue        $10,000,000  $10,000,000    $10,000,000

Total revenue         $2,800,000    $7,300,000     $10,000,000

recognized (% of completion x total revenue)

- Revenue recognized       ($0)    ($2,800,000)    ($7,200,000)

in previous year    

= revenue recognized  $2,800,000   $4,500,000     $2,700,000

in current year

gain/loss                                2018                 2019          2020

Revenue                        $2,800,000  $4,500,000    $2,700,000

- Cost incurred             ($2,184,000) ($3,510,000)   ($2,316,600)

Gross profit                     $616,000     $990,000       $383,400

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Answer: b. Increases, decreasing

Explanation: For most companies, the web increases the threat that new competitors will enter the market by decreasing traditional barriers to entry. Traditional barriers to entry include

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3 years ago
National accounting identities Let C stand for consumption spending, I for investment, G for government purchases, X for exports
madreJ [45]

Answer:

A. National income must equal domestic product.

True.

Explanation:

National Income is the total value of goods and services produced in a country during a financial period. It is total income from a country's economic activities.

Domestic product is monetary value of all economic activities of a country during a period.

National Income is sum of Investments, Savings, Government expenditures and net exports. National Income equals the domestic products of a country. The equation is as follows:

C + I + G + (X - IM) = DI + NT.

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4 0
3 years ago
In which one of the following instances is rivalry among competing sellers notmore intense?
dimaraw [331]

Answer: E.When there are so many industry rivals that the impact of any one company's actions is spread thinly across all industry members

Explanation:

The more the number of players in an industry the more it gets congested and especially for the competing sellers. The decision for increasing or reducing price is met by follower firms to do the same thing. It gets less competitive because you know all the players in the industry would be following the same practices and doing the same thing.

7 0
3 years ago
Fasetech, Inc. has collected the following data.? (There are no beginning? inventories.)
Dominik [7]

Answer:

The correct answer is C.

Explanation:

Giving the following information:

Units produced= 510 units

Sales price= $150 per unit

Direct materials= $16 per unit

Direct labor= $10 per unit

Variable manufacturing overhead= $10 per unit

Fixed manufacturing overhead= $16,000 per year

Variable selling and administrative costs= $9 per unit

Fixed selling and administrative costs= $10,500 per year

Units sold= 500

Under the absorption costing method, the fixed overhead costs get allocated as a product cost.

Unitary fixed overhead= 16,000/510= $31.37

Total unitary cost= direct material + direct labor + total overhead

TUC= 16 + 10 + (10 + 31.37)= $67.37

Income statement:

Sales= 500*150= 75,000

COGS= 67.37*500= (33,685)

Gross profit= 41,315

Total variable selling and administrative costs= (9*500)= (4,500)

Fixed selling and administrative costs= (10,500)

Net operating profit= 26,315

5 0
3 years ago
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