Exercise $6-21($Algo$)$ Long$-$term contract; revenue recognition over time; loss projected on entire project

$[$LO$6-9]$

On February $1,2024,$ Arrow Construction Company entered into a three$-$year construction contract to build a bridge for a price of

$$8,480,000.$ During $2024,$ costs of $$2,160,000$ were incurred with estimated costs of $$4,160,000$ yet to be incurred. Billings of

$$2,660,000$ were sent, and cash collected was $$2,410,000.$

In $2025,$ costs incurred were $$2,660,000$ with remaining costs estimated to be $$3,840,000\mathrm{.}2025$ billings were $$2,910,000,$ and

$$2,635,000$ cash was collected. The project was completed in $2026$ after additional costs of $$3,960,000$ were incurred. The

company's fiscal year$-$end is December $31.$ Arrow recognizes revenue over time according to percentage of completion.

Required:

Calculate the amount of revenue and gross profit or loss to be recognized in each of the three years.

$2$a$.$ Prepare journal entries for $2024$ to record the transactions described $($credit "Cash, Materials, etc." for construction costs incurred$).$

$2$b$.$ Prepare journal entries for $2025$ to record the transactions described $($credit "Cash, Materials, etc." for construction costs incurred$).$

$3$a$.$ Prepare a partial balance sheet to show the presentation of the project as of December $31,2024.$

$3$b$.$ Prepare a partial balance sheet to show the presentation of the project as of December $31,2025.$

Complete this question by entering your answers in the tabs below.

Calculate the amount of revenue and gross profit or loss to be recognized in each of the three years.

Note: Do not round intermediate calculations. Loss amounts should be indicated with a minus sign. Round your final answers to the nearest

whole dollar.