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. Reg 1 Req 2A Req 2B Req Req 3B Calculate the amount of revenue and gross profit or loss to be recognized indicated with a minus sign.) Year Revenue recognized Gross profit (loss) recognized 2021 2022 2023 Total $ 0 $ 0 Complete this question by entering your answers in the tabs below. Reg 1 Req 2A Req 2B Req 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.) Year General Journal Debit Credit 2021 Construction in progress 2,100,000 Various accounts 2,100,000 No 1 Req 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.) General Journal Debit Credit 2022 Construction in progress 2,620,000 Various accounts 2,620,000 No Year 1 ND 2022 2,870,000 Accounts receivable Billings on construction contract 2,870,000 3 2022 2,575,000 Cash Accounts receivable 2,575,000 4 2022 Loss on long-term contract Construction in progress Reg 1 Reg 2A Reg 2B Reg 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 At December 31, 2021 Current assets: Accounts receivable Current liabilities: Billings in excess of costs Reg 1 Reg 2A Req 2B Reg 3A Req 3B Prepare a partial balance sheet to show the presentation of the project as of December 31, 2022. (Do not round Intermediate calculations. Round your answers to the nearest dollar amount.) Balance Sheet At December 31, 2022 Current assets: $ 4,100,000 Accounts receivable Current liabilities: Billings in excess of costs
