Acc421 Intermediate Accounting: P5-6 This is a variation of Problem 5-5 modified to focus

Acc421 Intermediate AccountingProblem 5-6                                                                                                    This is a variation of Problem 5-5 modified to focus on the completed contract method                                                                                                    Required:                                                                                                       Complete the requirements of Problem 5-5 assuming that Westgate Construction uses the completed contract method.                                                                                                          In 2011, 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 2013. Information related to the contract is as follows:                                                                                                               2011    2012                2013                                                  Cost incurred during the year 2,400,000        3,600,000                    $2,200,000Estimated costs to complete as of year-end     5,600,000        2,000,000                -                                       Billings during the year           2,000,000        4,000,000                    4,000,000             Cash collections during year   1,800,000        3,600,000                    4,600,000                                                      Required:                                                                                                       1. Calculate the amount of gross profit to be recognized in each of the three years                                                                                                 2. Prepare all necessary journal entries for each of the years (credit various accounts for construction costs incurred).        3. Prepare a partial balance sheet for 2011 and 2012 showing any items related to the contract.