On February 1, 2021, Arrow Construction Company entered into a three-year construction contract to build a bridge for a price of $8,330,000. During 2021, costs of $2,110,000 were incurred with estimated costs of $4,110,000 yet to be incurred. Billings of $2,610,000 were sent, and cash collected was $2,360,000. In 2022, costs incurred were $2,610,000 with remaining costs estimated to be $3,765,000. 2022 billings were $2,860,000 and $2,585,000 cash was collected. The project was completed in 2023 after additional costs of $3,910,000 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 2021, 2022, and 2023 using the percentage of completion method. 2a. Prepare journal entries for 2021 to record the transactions described (credit "various accounts" for construction costs incurred). 2b. Prepare journal entries for 2022 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, 2021. 3b. Prepare a partial balance sheet to show the presentation of the project as of December 31, 2022.

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2A.

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2022 To date Recognized in prior years Recognized in 2022 $ Construction revenue 4,633,777 2,825,772 $ 1,808,005 $ Construction expense 2,610,000 4,720,000 2,110,000 Gross profit (loss) 715,772 (715,772) General Journal Credit No Year Debit Construction in progress 2,110,000 1 2021 Various accounts 2,110,000 Accounts receivable 2 2021 2,825,772 2,825,772X Billings on construction contract 2,360,000 2021 Cash 2,360,000 Accounts receivable Cost of construction Construction in progress 4 2021 2,110,000 715,772 Revenue from long-term contracts 2,825,772 Dea 1 st Req 1 Req 2B Req 2A Req 3A Req 3B Prepare journal entries for 2022 to record the transactions described (credit "various accounts" for con incurred). (If no entry is required for a transaction/event, select "No journal entry required" in the first round intermediate calculations. Round your answers to the nearest dollar amount.) No Debit Year General Journal Credit KReq 2A Req 3A Req 1 Req 2A Req 2B Req 3A Req 3B Prepare a partial balance sheet to show the presentation of the project as of December 31, 2021. (Do not round intermediate calculations. Round your answers to the nearest dollar amount.) Balance Sheet (Partial) At December 31, 2021 Current assets: Current liabilities: Req 2B Req 3B Req 2A Req 1 Req 2B Req 3A Req 3B Prepare a partial balance sheet to show the presentation of the project as of December 31, 2022. (Do not calculations. Round your answers to the nearest dollar amount.) Balance Sheet (Partial) At December 31, 2022 Current assets: Current liabilities: Req 3B Req 3A