$[$L$06-9]$

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\mathrm{.}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:

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

$2$a$.$ Prepare journal entries for $2024$ to record the transactions described $($credit "Cash, Materials, etc." for construction costs incurred$).$

$2$b$.$ Prepare journal entries for $2025$ to record the transactions described $($credit "Cash, Materials, etc." for construction costs incurred$).$

$3$a$.$ Prepare a partial balance sheet to show the presentation of the project as of December $31,2024.$

$3$b$.$ Prepare a partial balance sheet to show the presentation of the project as of December $31,2025.$

Complete this question by entering your answers in the tabs below.

Req $1$

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.

$\backslash$table$[[$Percentages of completion$],[2024,,,=,],[2025,,,=,],[2026,,,=,],[2024],[,$To date,Recognized in prior years,,Recognized in $2024],[\backslash$table$[[$Construction revenue$],[$Construction expense$]]],[\backslash$table$[[$Construction revenue$],[$Construction expense$]]],[$Gross profit $($loss$),,,,]]$