Hello,

If you could please solve the following problem and include all the steps so I may complete similar problems in the future myself, that would be greatly appreciated. Just a heads up, the answer of a gross profit of 724,744 in 2016 is wrong. I have a feeling it has something to do with the following: This project DOES NOT QUALIFY for revenue recognition over time. Please make sure you provide the correct answer. All other answers to this question on Chegg are wrong. Thank you very much in advance.

On February 1, 2016, Arrow Construction Company entered into a three-year construction contract to build a bridge for a price of $8,325,000. During 2016, costs of $2,130,000 were incurred, with estimated costs of $4,130,000 yet to be incurred. Billings of $2,656,000 were sent and cash collected was $2,380,000. In 2017, costs incurred were $2,656,000 with remaining costs estimated to be $3,795,000. 2017 billings were $2,906,000, and $2,605,000 cash was collected. The project was completed in 2018 after additional costs of $3,930,000 were incurred. The companys fiscal year-end is December 31. This project does not qualify for revenue recognition over time.

Calculate the amount of revenue recognized and gross profit or loss to be recognized in each of the three years.