On February $1,2024,$ Arrow Construction Company entered into a three$-$year construction contract to build a bridge for a price of $$8,000,000.$ During $2024,$ costs of $$2,000,000$ were incurred, with estimated costs of $$4,000,000$ yet to be incurred. Billings of $$2,500,000$ were sent, and cash collected was $$2,250,000.$

In $2025,$ costs incurred were $$2,500,000$ with remaining costs estimated to be $$3,600,000\mathrm{.}2025$ billings were $$2,750,000,$ and $$2,475,000$ cash was collected. The project was completed in $2026$ after additional costs of $$3,800,000$ were incurred. The company's fiscal year$-$end is December $31.$ This project does not qualify for revenue recognition over time.

Required:

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

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$).$

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.

Req

Req $2B$

Req $3A$

Req $3B$

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

Note: If no entry is required for a transaction$/$event$,$ select $"$No journal entry requlred" in the first account field.

Journal entry worksheet

Record the construction costs.