On February 1, 2016, Arrow Construction Company entered into a three-year construction contract to build a bridge for a price of $8,390,000. During 2016, costs of $2,130,000 were incurred with estimated costs of $4,130,000 yet to be incurred. Billings of $2,630,000 were sent and cash collected was $2,380,000.

In 2017, costs incurred were $2,630,000 with remaining costs estimated to be $3,795,000. 2017 billings were $2,880,000 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. 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? 2. 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.)