On February 1 , 2 0 2 4 , Arrow Construction Company entered into a three

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Question:

On February $1, 2024,$ Arrow Construction Company entered into a three $-$ year construction contract to build a bridge for a price of $ $8, 090, 000 .$ During $2024,$ costs of $ $2, 030, 000$ were incurred with estimated costs of $ $4, 030, 000$ yet to be incurred. Billings of $ $2, 530, 000$ were sent, and cash collected was $ $2, 280, 000 .$

In $2025,$ costs incurred were $ $2, 530, 000$ with remaining costs estimated to be $ $3, 645, 000 . 2025$ billings were $ $2, 780, 000,$ and $ $2, 505, 000$ cash was collected. The project was completed in $2026$ after additional costs of $ $3, 830, 000$ were incurred. The company $’$ s fiscal year $-$ end is December $31 .$ Arrow recognizes revenue over time according to percentage of completion.

Required:

$1 .$ 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 $31, 2025 .$