Exercise 6-21 (Static) Long-term contract; revenue recognition over time; loss projected on entire project [LO6-9] On February 1, 2024, Arrow Construction Company entered into a three-year construction contract to build a bridge for a price of $8,000,000. During 2024, costs of $2,000,000 were incurred with estimated costs of $4,000,000 yet to be incurred. Billings of $2,500,000 were sent, and cash collected was $2,250,000. In 2025, costs incurred were $2,500,000 with remaining costs estimated to be $3,600,000. 2025 billings were $2,750,000, and $2.475,000 cash was collected. The project was completed in 2026 after additional costs of $3,800,000 were incurred. The company's fiscal year-end is December 31 Arrow recognizes revenue over time according to percentage of completion. Required: 1. Calculate the amount of revenue and gross profit or loss to be recognized in each of the three years. 20. Prepare journal entries for 2024 to record the transactions described (credit "Cash, Materials, etc" for construction costs incurred). 2b. Prepare journal entries for 2025 to record the transactions described (credit "Cash, Materials, etc for construction costs incurred). 30. Prepare a partial balance sheet to show the presentation of the project as of December 31, 2024. 3b. Prepare a partial balance sheet to show the presentation of the project as of December 31, 2025 Answer is not complete. Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 28 Req 3A Req 38 Calculate the amount of revenue and gross profit or loss to be recognized in each of the three years. Note: Do not round intermediate calculations. Loss amounts should be indicated with a minus sign. Round your final answers to the nearest whole dollar. Percentages of completion 2024 $ 2,000,000 + $ 2025 S 4,500,000 S 6,000,000 = 8,100,000 = 33 3333% 2026 S 8,300,000 - S 8.300.000 E 55.5556% 100.0000% 2024 To date Recognized in prior years Recognized in 2024 Construction revenue S 2,666,667 $ 0 $ 2.666,667 Construction expense S (2.000.000) S Gross profit (loss) $ 666,667 $ 05 (2.000.000) 666,667 2025 To date Recognized in prior years Recognized in 2025 Construction revenue $ 4,444,444 $ Construction expense S (4,500,000) $ (2.000.000) 2,666,667 S S 1.777777 (2,500,000) Gross profit (loss) $ (555,556) $ 666.667 S (1.222 223) 2026 To date Construction revenue $ Construction expense $ Gross profit (loss) S Recognized in prior years Recognized in 2026 8,000,000 $ (8,300,000) S (300,000) $ (4,500,000) S (555,556) S Req 2A > 4,444,447 $ 3,555,553 (3,800,000) 255,556