Exercise 6-21 (Algo) Long-term contract; revenue recognition over time; loss projected on entire project (LO6-9) 343748 BOOK Print On February 1, 2021 Arrow Construction Company entered into a three-year construction contract to build a bridge for a price of $8,540,000 During 2021, costs of $2,180,000 were incurred with estimated costs of $4,180,000 yet to be incurred, Billings of $2,680,000 were sent, and cash collected was $2,430,000. In 2022, costs incurred were $2,680,000 with remaining costs estimated to be $3,870,000. 2022 billings were $2,930,000 and $2,655,000 cash was collected. The project was completed in 2023 after additional costs of $3,980,000 were incurred. The company's fiscal year-end is December 31. Arrow recognizes revenue over time according to percentage of completion Required: 1. Compute the amount of revenue and gross profit or loss to be recognized in 2021, 2022 and 2023 using the percentage of completion method 20. Prepare journal entries for 2021 to record the transactions described (credit various accounts for construction costs incurred). 2b. Prepare Journal entries for 2022 to record the transactions described (credit "various accounts for construction costs incurred), 3a. Prepare a partial balance sheet to show the presentation of the project as of December 31, 2021. 3b. Prepare a partial balance sheet to show the presentation of the project as of December 31, 2022. ces Complete this question by entering your answers in the tabs below. Roq 1 Req 2A Reg 20 Req 3A Req 30 Compute the amount of revenue and gross profit or loss to be recognized in 2021, 2022, and 2023 using the percentage of completion method. (Do not round Intermediate calculations, loss amounts should be indicated with a minus sign. Round your final answers to the nearest whole dollar) + % complete to date $ 2021 2022 XOOO 30 $ + Percentages of completion Choose numerator Choose denominator Actual costs to date Estimated total costs 2,180,000+ $ 6,360,000 4,860,000 $ 8,730,000 8,660,000 $ 8,660,000 2021 To date Recognized in prior years 2,927 230 S 0 2,180,000 0 747,230 0 34.2767% 55.6701% 100.0000% 2023 $ $ $ Construction revenue Construction expense Gross profit (loss) Recognized in 2021 2,927,230 2,180,000 747,230 $ $ $ Construction revenue Construction expense Gross profit (loss) 2022 To date Recognized in prior years 4,754,227 $ 2,927,230 4,860,000 2,180,000 (105,773) $ 747,230 Recognized in 2022 1,826,997 2,680,000 (853,003) $ S $ $ $ Construction revenue Construction expense Gross profit (loss) S $ 2023 To date Recognized in prior years 8,540,000 S 4,754,227 8,660,000 X $ 4,860,000 (120,000) (105,773) Recognized in 2023 3,785,773 3,800,000 (14,227) $ $ $ Reg 1 Reg 2A Reg 28 Reg 3A Reg 38 Prepare journal entries for 2022 to record the transactions described (credit "various accounts for construction costs incurred). (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Round your answers to the nearest dollar amount.) No Year Credit 36:37 1 2022 General Journal Construction in progress Various accounts Debit 2,680,000 OO 2,680,000 2. 2022 2.930,000 Accounts receivable Billings on construction contract 2.930,000 3 2022 2,655,000 Cash Accounts receivable plo 2,655,000 4 2022 2,590,000 3 Cost of construction Construction in progress Revenue from long-term contracts OO 747,464 1,802,546 Reg 2A ReqSA > Return to question Reg 1 Reg 2A Reg 2B Reg 3 Reg 38 Prepare a partial balance sheet to show the presentation of the project as of December 31, 2021. (Do not round intermediate calculations. Round your answers to the nearest dollar amount.) 36.24 Balance Sheet (Partial) At December 31, 2021 Current assets: Accounts receivable Cash 250,000 $ 3 Current liabilities: 500,000 6 Reg 1 Reg 2A Reg 28 Reg Reg 3B Prepare a partial balance sheet to show the presentation of the project as of December 31, 2022. (Do not round intermediate calculations. Round your answers to the nearest dollar amount.) bits 04:36:00 Balance Sheet (Partial) At December 31, 2022 Current assets: Accounts receivable Current liabilities: (Reg SA