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 company's 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. Complete this question by entering your answers in the tabs below. Reg 1 Reg 2A Req 2B Reg Reg 3B Compute the amount of revenue and gross profit or loss to be recognized in 2021, 2022, and 2023 using the percentage of completion method. (Do not round intermediate calculations. Loss amounts should be indicated with a minus sign. Round your final answers to the nearest whole dollar.) Percentages of completion Choose numerator - Choose denominator = % complete to date Estimated total costs 2021 $ - $ 33.9228% Actual costs to date 2,110,000 4,720,000 4,420,000 X 2022 $ $ 6,220,000 = 8,485,000 8,630,000 55.6276% 51.2167% 2023 $ $ 2021 To date Recognized in prior years Construction revenue $ $ Recognized in 2021 2,825,772 2,110,000 715,772 Construction expense 2,825,772 2,110,000 715,772 $ $ Gross profit (loss) $ $ Construction revenue $ 2022 To date Recognized in prior years 155,000 X $ 2,825,772 $ 715,772 X $ 2,110,000 $ (560,772) X $ 715,772 $ Recognized in 2022 (2,670,772) (1,394,228) (1,276,544) $ Construction expense Gross profit (loss) $ 2023 To date Recognized in prior years Construction revenue $ $ 300,000 X 155,000 X Recognized in 2023 300,000 155,000 Construction expense $ $ Gross profit (loss) $ 145,000 X $ 145,000 Reg 1 Reg 2A Reg 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. Do not round intermediate calculations. Round your answers to the nearest dollar amount.) No Year General Journal Debit Credit Req 1 Req 2A Req 2B Reg 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. Do not round intermediate calculations. Round your answers to the nearest dollar amount.) No Year General Journal Debit Credit Reg 1 Reg 2A Req 2B Reg Reg 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: Reg 1 Reg 2A Reg 2B Req 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 (Partial) At December 31, 2022 Current assets: Current liabilities
