Exercise 6-22 (Algo) Long-term contract; revenue recognition upon project completion; loss projected on entire project (L06-8, 6-9) 22 On February 1, 2021, Arrow Construction Company entered into a three-year construction contract to build a bridge for a price of $8,500,000. During 2021, costs of $2,200,000 were incurred, with estimated costs of $4,200,000 yet to be incurred. Billings of $2,740,000 were sent, and cash collected was $2,450,000. In 2022, costs incurred were $2,740,000 with remaining costs estimated to be $3,900,000. 2022 billings were $2,990,000, and $2,675,000 cash was collected. The project was completed in 2023 after additional costs of $4,000,000 were incurred. The company's 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. Complete this question by entering your answers in the tabs below. Reg 1 Req 2A Reg 2B ReQ 3A Reg 38 Calculate the amount of revenue and gross profit or loss to be recognized in each of the three years. (Loss amounts should indicated with a minus sign.) Check View transaction list Journal entry worksheet > RE Saved Smework Help Save View transaction list Journal entry worksheet LE 04:21 Record the cash collections. ped Note: Enter debits before credits. ook General Journal Debit int Credit Year 2021 ences Record entry Clear entry View general Journal (Reg 1 Reg 28 > Journal entry worksheet 2 3 4 3:04:08 Record the gross profit or loss. ped Note: Enter debits before credits. bok General Journal Debit Credit rint Year 2021 roncos Record entry Clear entry View general journal View transaction list Journal entry worksheet View transaction list Journal entry worksheet Record the progress billings. Note: Enter debits before credits. Year General Journal Debit Credit 2022 Record entry Clear entry View general journal entry is requireu cord transaction/event, SLIECL No journal entry requireu in the SL account het.) View transaction list Journal entry worksheet 1 2. 3 3 4 > Record the cash collections. Note: Enter debits before credits. Year General Journal Debit Credit 2022 Record entry Clear entry View general journal Req 2A Req 3A > Prey 7 of 7 Next Check my work 20. Prepare journal entries for 2022 to recora the transactions described (creat 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. Complete this question by entering your answers in the tabs below. 4:03:02 Reg 1 Reg 2 Reg 2B Reg 3A pped Reg 38 Prepare a partial balance sheet to show the presentation of the project as of December 31, 2021. (Do not round intermedia calculations. Round your answers to the nearest dollar amount.) Book Print Balance Sheet At December 31, 2021 rences Current assets: Current liabilities: Prepare a partial balance sheet to show the presentation of the project as of December 31, calculations. Round your answers to the nearest dollar amount.) ook int Balance Sheet At December 31, 2022 "ences Current assets: Current liabilities: