On February 1, 2016, Arrow Construction Company entered into a three-year construction contract to build a bridge for a price of $8,300,000. During 2016, costs of $2,100,000 were incurred with estimated costs of $4,100,000 yet to be incurred. Billings of $2,600,000 were sent and cash collected was $2,350,000. In 2017, costs incurred were $2,600,000 with remaining costs estimated to be $3,750,000. 2017 billings were $2,850,000 and $2,575,000 cash was collected. The project was completed in 2018 after additional costs of $3,900,000 were incurred. The company's fiscal year-end is December 31. Arrow recognizes revenue over time according to percentage of completion.

Required:

1.

Compute the amount of revenue and gross profit or loss to be recognized in 2016, 2017, and 2018 using the percentage-of-completion method. (Do not round intermediate calculations.)

	2016	2017	2018
Estimated total gross profit (loss)
Actual total gross profit (loss)

Percentages of completion
	Choose numerator		Choose denominator	=	% complete to date
2016				=
2017				=
2018					100.0000%

2016
	To date	Recognized in prior years	Recognized in 2016
Construction revenue
Construction expense
Gross profit (loss)
2017
	To date	Recognized in prior years	Recognized in 2017
Construction revenue
Construction expense
Gross profit (loss)
2018
	To date	Recognized in prior years	Recognized in 2018
Construction revenue
Construction expense
Gross profit (loss)

2-a.

Prepare journal entries for 2016 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. Do not round intermediate calculations. Round your answers to the nearest dollar amount.)

Required: Journal Entry for 2016:

1) Record the construction costs

2) Record the progress bill

3) Record the cash collections

4) Record the gross profit

5) Record the expected loss

2-b.

Prepare journal entries for 2017 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. Do not round intermediate calculations. Round your answers to the nearest dollar amount.)

1) Record the construction costs

2) Record the progress billing

3) Record the cash collections

4) Record the expected loss

5) Record the gross profit

3-a.

Prepare a partial balance sheet to show the presentation of the project as of December 31, 2016. (Do not round intermediate calculations. Round your answers to the nearest dollar amount.)

Balance Sheet (Partial)
At December 31, 2016
Current assets:
Current liabilities:

3-b.	Prepare a partial balance sheet to show the presentation of the project as of December 31, 2017. (Do not round intermediate calculations. Round your answers to the nearest dollar amount.)

Balance Sheet (Partial)
At December 31, 2017
Current assets:
Current liabilities: