On February 1, 2018, Arrow Construction Company entered into a three-year construction contract to build a bridge for a price of \$8,570,000. During 2018, costs of \$2,190,000 were incurred with estimated costs of \$4,190,000 yet to be incurred. Billings of \$2,690,000 were sent, and cash collected was \$2,440,000. In 2019, costs incurred were \$2,690,000 with remaining costs estimated to be \$3,885,000. 2019 billings were \$2,940,000 and \$2,665,000 cash was collected. The project was completed in 2020 after additional costs of \$3,990,000 were incurred. The company’s fiscal year-end is December 31. Arrow recognizes revenue over time according to percentage of completion. Requlrec: 1. Compute the amount of revenue and gross profit or loss to be recognized in 2018, 2019, and 2020 using the percentage of completion method? 2a. Prepare journal entries for 2018 to record the transactions described (credit “various accounts” for construction costs incurred) 2b. Prepare journal entries for 2019 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, 2018. 3b. Prepare a partial balance sheet to show the presentation of the project as of December 31, 2019. Answer is not complete. Complete this question by entering your answers in the tabs below Req 1 Req 2A Req 2B Req 3A 2q Compute the amount of revenue and gross profit or loss to be recognized in 2018, 2019, and 2020 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.) Choose denominator % complete to dste Choose numerator Actusl costs to date | ÷ Estimated total costs。 2018 2019 2020 8,380,000 8,785,000 34.3260% 55.8760% 100.0000% 2.190.000 ÷ 4.880.000 2018 Recognized in prior To date Recognized in 2018 2,941,224 2.190,000 751,224 Construction 2941,224 2.190,000 751,224 Gross profit (loss) 2019 Recognized in prior To date Recognized in 2019 Construction 2.941,224 2.190,000 4.770.919 1.829,895 2.190,000 Gross profit (loss) 2020 Recognized in prior To date Recognized in 2020 Construction

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1.

2018

 To Date Recognised in prior years Recognised in 2018 Construction Revenue \$2,941,740* \$0 \$2,941,740 Construction Expense \$2,190,000 \$0 \$2,190,000 Gross Profit (loss) \$751,740** \$0 \$751,740

*\$8,570,000 x 34.3260% = \$2,941,740

**\$2,941,740 – \$2,190,000 = \$751,740

2019

 To date Recognised in prior years Recognised in 2019 Construction Revenue \$4,771,433 \$2,941,740 \$1,829,693 Construction Expense \$4,880,000 \$2,190,000 \$2,690,000 Gross Profit (Loss) (\$108,567) \$751,740 (\$860,307)

2020

 To date Recognised in prior years Recognised in 2020 Construction Revenue \$8,570,000 \$4,771,433 \$3,798,567 Construction Expense \$8,870,000 \$4,880,000 \$3,990,000 Gross Profit (Loss) (\$300,000) (\$108,567) (\$191,433)
 2a Year General Journal Debit Credit 2018 Construction in Progress \$2,190,000 Various Accounts \$2,190,000 2018 Accounts Receivable \$2,690,000 Billings on Construction Contract \$2,690,000 2018 Cash \$2,440,000 Accounts Receivable \$2,440,000 2018 Construction in Progress \$751,740 Construction Expense \$2,190,000 Construction Revenue \$2,941,740
 2b Year General Journal Debit Credit 2019 Construction in Progress \$2,690,000 Various Accounts \$2,690,000 2019 Accounts Receivable \$2,940,000 Billings on Construction Contract \$2,940,000 2019 Cash \$2,665,000 Accounts Receivable \$2,665,000 2019 Construction Expense \$2,690,000 Construction in Progress \$860,307 Construction Revenue \$1,829,693
 3a Balance sheet 2018 Current Assets: Account Receivable \$250,000 Costs and profit in excess of billings \$251,740
 3b Balance sheet 2019 Current Assets: Account Receivable \$525,000 Current Liabilities: Billings in Excess of costs \$858,567