Arrow construction company entered into a three-year

Question

On February 1, 2016, Arrow Construction Company entered into a three-year construction contract to build a bridge for a price of $8,210,000. During 2016, costs of $2,070,000 were incurred with estimated costs of $4,070,000 yet to be incurred. Billings of $2,570,000 were sent and cash collected was $2,320,000.

In 2017, costs incurred were $2,570,000 with remaining costs estimated to be $3,705,000. 2017 billings were $2,820,000 and $2,545,000 cash was collected. The project was completed in 2018 after additional costs of $3,870,000 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 2016, 2017, and 2018 using the percentage-of-completion method?

2-a.	Prepare journal entries for 2016 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.)

2-b.	Prepare journal entries for 2017 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.)

3-a.	Prepare a partial balance sheet to show the presentation of the project as of December 31, 2016.(Do not round intermediate calculations. Round your answers to the nearest dollar amount.)

3-b.	Prepare a partial balance sheet to show the presentation of the project as of December 31, 2017.(Do not round intermediate calculations. Round your answers to the nearest dollar amount.)