On February 1, 2021, Arrow Construction Company entered into a three-year construction contract to build a bridge for a price of $8,000,000. During 2021, costs of $2,000,000 were incurred, with estimated costs of $4,000,000 yet to be incurred. Billings of $2,500,000 were sent, and cash collected was $2,250,000. In 2022, costs incurred were $2,500,000 with remaining costs estimated to be $3,600,000. 2022 billings were $2,750,000, and $2,475,000 cash was collected. The project was completed in 2023 after additional costs of $3,800,000 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. Req 1 Req 2A Reg 2B Req Reg 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 Revenue recognized $ 0 Gross profit (loss) recognized $ 2021 0 2022 0 2023 Total $ 0 $ 0 Reg 1 Reg 2A Req 2B Reg 3A Req 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.) View transaction list View journal entry worksheet X No Year General Journal Debit Credit 1 2021 Construction in progress 2,000,000 Various accounts 2,000,000 2 2021 2,500,000 Accounts receivable Billings on construction contract 2,500,000 3 2021 Cash 2,250,000 Accounts receivable 2,250,000 Req 1 Reg 2A Reg 2B Reg Req 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.) View transaction list Journal entry worksheet Record the gross profit or loss. Note: Enter debits before credits. Year General Journal Debit Credit 2021 Reg 1 Reg 2A Req 2B Req 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.) View transaction list View journal entry worksheet No Year General Journal Debit Credit 1 2022 Construction in progress 2,500,000 Accounts receivable 2,500,000 2 2022 2,750,000 Accounts receivable Billings on construction contract 2,750,000 3 2022 Cash 2,475,000 Accounts receivable 2,475,000 Reg 1 Req 2A Reg 2B Reg Reg 3B repare journal entries for 2022 to record the transactions described (credit "various accounts" for construction costs incurred). (If no ntry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet
