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.

a) Record the gross profit for year 2017

b) Prepare a partial balance sheet to show the presentation of the project as of December 31, 2017.

c)

YEAR 2016	To date	Recognized in prior years	recognized in 2016
Construction revenue	$2,854,744	$0	$2,854,744
Construction expense	$2,130,000	$0	$2,130,000
Gross Profit (loss)	$724,744	$0	$724,744
YEAR 2017	To date	Recognized in prior years	recognized in 2017
Construction revenue		$2,854,744
Construction expense		$2,130,000
Gross Profit (loss)		$724,744
YEAR 2018	To date	Recognized in prior years	recognized in 2017
Construction revenue
Construction expense
Gross Profit (loss)