Acc421 Intermediate Accounting: P5-5 In 2011, The Westgate Construction Company entered into

Acc421 Intermediate AccountingProblem 5-5                                                    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                2013Cost 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                    4,000,000Cash collections during year   1,800,000                    3,600,000                    4,600,000Westgate uses the percentage-of-completion method of accounting for long-term construction contracts.                                                 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.