Exercise 6-22 (Algo) Long-term contract; revenue recognition upon project completion; loss projected on entire project [LO6-8, 6-9]

On February 1, 2021, Arrow Construction Company entered into a three-year construction contract to build a bridge for a price of $8,275,000. During 2021, costs of $2,110,000 were incurred, with estimated costs of $4,110,000 yet to be incurred. Billings of $2,632,000 were sent, and cash collected was $2,360,000. In 2022, costs incurred were $2,632,000 with remaining costs estimated to be $3,765,000. 2022 billings were $2,882,000, and $2,585,000 cash was collected. The project was completed in 2023 after additional costs of $3,910,000 were incurred. The companys fiscal year-end is December 31. This project does not qualify for revenue recognition over time. Required: 1. Calculate the amount of revenue and gross profit or loss to be recognized in each of the three years. 2a. 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.

X Answer is not complete. Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B Req Req 3B Calculate the amount of revenue and gross profit or loss to be recognized in each of the three years. (Loss amounts should be indicated with a minus sign.) Year Revenue recognized Gross profit (loss) recognized 0 2021 $ 0 2022 0 2023 Total $ 0 0 0 Reg 1 Reg 2A Req 2B Reg 3A Reg 3B Prepare journal entries for 2021 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.) View transaction list Journal entry worksheet Record the construction costs. Note: Enter debits before credits. Year General Journal Debit Credit 2021 Journal entry worksheet 1 2 4 > Record the progress billings. Note: Enter debits before credits. Year General Journal Debit Credit 2021 Record entry Clear entry View general journal Journal entry worksheet Record the gross profit or loss. Note: Enter debits before credits. Year General Journal Debit Credit 2021 Record entry Clear entry View general journal Reg 1 Req 2A Req 2B Req Req 3B 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.) View transaction list Journal entry worksheet Record the construction costs. Note: Enter debits before credits. Year General Journal Debit Credit 2022 Req 1 Req 2A Req 2B Req Req 3B 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.) Balance Sheet At December 31, 2021 Current assets: Current liabilities: