On February 1, 2018, Arrow Construction Company entered into a three-year construction contract to build a bridge for a price of $8,240,000. During 2018, costs of $2,080,000 were incurred with estimated costs of $4,080,000 yet to be incurred. Billings of $2,580,000 were sent, and cash collected was $2,330,000. In 2019, costs incurred were $2,580,000 with remaining costs estimated to be $3,720,000. 2019 billings were $2,830,000 and $2,555,000 cash was collected. The project was completed in 2020 after additional costs of $3,880,000 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 2018, 2019, and 2020 using the percentage of completion method? 2a. Prepare journal entries for 2018 to record the transactions described (credit "various accounts" for construction costs incurred). 2b. Prepare journal entries for 2019 to record the transactions described (credit "various accounts" for construction costs incurred). 3a. Prepare a partial balance sheet to show the presentation of the project as of December 31, 2018. 3b. Prepare a partial balance sheet to show the presentation of the project as of December 31, 2019.

Req 1 Req 2A Req 2B Req 3A Req 3B Compute the amount of revenue and gross profit or loss to be recognized in 2018, 2019, and 2020 using the percentage of completion method? (Do not round intermediate calculations. Loss amounts should be indicated with a minus sign. Round your final answers to the nearest whole dollar.) Percentages of completion Choose numerator Choose denominator % complete to date Actual costs to date Estimated total costs 33.7662% 2018 $ 2,080,000 6,160,000 4,660,000 8,380,000 55.6086% 2019 2020 100.0000% 2018 Recognized in prior years Recognized in 2018 To date 2,782,338S Construction revenue 2,782,338 $ Construction expense 2,080,000 S 0 S 2,080,000 Gross profit (loss) 702,338 $ S 0 702,338 2019 Recognized in prior years To date Recognized in 2019 4,582,148 4,660,000 2,782,338S Construction revenue 1,799,810 Construction expense 2,080,000 $ 2,580,000 Gross profit (loss) S (77,852) 702,338 (780,190) 2020 Recognized in prior years To date Recognized in 2020 8,240,000 8,540,000 S (300,000) Construction revenue S 4,582,148 3,657,852 Construction expense $ 4,660,000 3,880,000 Gross profit (loss) (77,852) S (222,148) Req 1 Req 2B Req 2A Req 3A Req 3B Prepare journal entries for 2018 to record the transactions described (credit "various accounts" for construction costs in entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round inter calculations. Round your answers to the nearest dollar amount.) View transaction list View journal entry worksheet Debit No Year General Journal Credit 1 Construction in progress 2018 2,080,000 Various accounts 2,080,000 2,580,000 2 2018 Accounts receivable Billings on construction contract 2,580,000 2,330,000 2018 Cash 2,330,000 Accounts receivable Construction in progress 702,338 4 2018 Cost of construction 2,080,000 Revenue from long-term contracts 2,782,338 Year No General Journal Debit Credit Construction in progress 1 2019 2,580,000 Various accounts 2,580,000 Accounts receivable 2,830,000 2 2019 Billings on construction contract 2,830,000 3 2019 Cash 2,555,000 Accounts receivable 2,555,000 3,342,968 ( Service revenue 4 2019 X Deferred gross profit 3,342,968 5 2019 Cash 2,555,000 2,550,000 Various accounts LO Req 1 Req 2A Req 2B Req 3A Req 3B Prepare a partial balance sheet to show the presentation of the project a calculations. Round your answers to the nearest dollar amount.) Balance Sheet (Partial) At December 31, 2018 Current assets: 2,330,000 250,000 Cash Accounts receivable Current liabilities: Various accounts 2,080,000 Req 2A Req 2B Req 3A Req 1 Req 3B Prepare a partial balance sheet to show the presentation of the project a calculations. Round your answers to the nearest dollar amount.) Balance Sheet (Partial) At December 31, 2019 Current assets: 4,885,000 Cash 525,000 Accounts receivable Current liabilities: Various accounts $ 4,660,000