On February 1, 2021, Arrow Construction Company entered into a three-year construction contract to build a bridge for a price of $8,250,000. During 2021, costs of $2,100,000 were incurred, with estimated costs of $4,100,000 yet to be incurred. Billings of $2,620,000 were sent, and cash collected was $2,350,000. In 2022, costs incurred were $2,620,000 with remaining costs estimated to be $3,750,000. 2022 billings were $2,870,000, and $2,575,000 cash was collected. The project was completed in 2023 after additional costs of $3,900,000 were incurred. The company's fiscal year-end is December 31. This project does not qualify for revenue recognition over time. Required: 1. Calculate the amount of revenue and gross profit or loss to be recognized in each of the three years. 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. X Answer is not complete. Complete this question by entering your answers in the tabs below. Reg 1 Reg 2A Req 2B Reg 3A Req 3B Calculate the amount of revenue and gross profit or loss to be recognized in each of the three years. (Loss amounts should be indicated with a minus sign.) Answer is not complete. Complete this question by entering your answers in the tabs below. Reg 1 Reg 2A Req 2B Reg 3A Req 3B Calculate the amount of revenue and gross profit or loss to be recognized in each of the three years. (Loss amounts should be indicated with a minus sign.) Year 2021 2022 Revenue Gross profit (loss) recognized recognized $ 2,794,275 X $ 694,275 X 1,803,450 X (914,275) 3,652,275 x (150,000) $ 8,250,000 $ (370,000) 2023 Total Req 1 Req 2A Req 2B Req 3A Reg 3B Prepare journal entries for 2021 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.) No Year General Journal Debit Credit 1 2021 2,100,000 Construction in progress Various accounts 2,100,000 2 2021 2,620,000 > Accounts receivable Billings on construction contract 2,620,000 2021 Cash 2,350,000 00 Accounts receivable 2,350,000 4 2021 x 694,275 X Construction in progress Cost of goods sold Service revenue X 2,100,000 2,794,275 Reg 1 Req 2A Reg 2B Reg 3A Req 3B Prepare journal entries for 2022 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.) No Year General Journal Debit Credit 1 2022 Construction in progress 2,620,000 Various accounts 2,620,000 2 2022 Accounts receivable 2,870,000 Billings on construction contract 2,870,000 3 2022 Cash 2,575,000 Accounts receivable 2,575,000 4 2022 Cost of goods sold x 2,717,725 X Service revenue x 1,803,450 X 914,275 X Construction in progress Req 1 Req 2A Reg 2B Reg 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 At December 31, 2021 Current assets: $ Accounts receivable Billings in excess of costs 270,000 174,275 X X Current liabilities
