On February 1, 2021, Arrow Construction Company entered into a three-year construction contract to build a bridge for a price of $8,150,000. During 2021, costs of $2,050,000 were incurred with estimated costs of $4,050,000 yet to be incurred. Billings of $2,550,000 were sent, and cash collected was $2,300,000. In 2022, costs incurred were $2,550,000 with remaining costs estimated to be $3,675,000. 2022 billings were $2,800,000 and $2,525,000 cash was collected. The project was completed in 2023 after additional costs of $3,850,000 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.

What is the construction expense for 2022 along with the gross profit?

Choose numerator Choose denominator % complete to date Actual costs to date Estimated total costs 2021 2,050,000 $ 6,100,000 33.6066% 2022 4,600,000 8,275,000 55.5891% 8,450,000 8,450,000 100.0000% 2023 2021 Recognized in 2021 To date Recognized in prior years $ Construction revenue 2,738,938 0 2,738,938 Construction expense 2,050,000 $ C 2,050,000 Gross profit (loss) 688,938 $ 688,938 2022 Recognized in 2022 To date Recognized in prior years Construction revenue Construction expense Gross profit (loss) 4,530,512 2,738,938 1,791,574 4,600,000 $ $ 2,050,000 2,550,000 688,938 (688,938) 1033 II Choose numerator Choose denominator % complete to date Actual costs to date Estimated total costs 2021 2,050,000 $ 6,100,000 33.6066% 2022 4,600,000 8,275,000 55.5891% 8,450,000 8,450,000 100.0000% 2023 2021 Recognized in 2021 To date Recognized in prior years $ Construction revenue 2,738,938 0 2,738,938 Construction expense 2,050,000 $ C 2,050,000 Gross profit (loss) 688,938 $ 688,938 2022 Recognized in 2022 To date Recognized in prior years Construction revenue Construction expense Gross profit (loss) 4,530,512 2,738,938 1,791,574 4,600,000 $ $ 2,050,000 2,550,000 688,938 (688,938) 1033