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On February 1, 2021, Arrow Construction Company entered into a three-year construction contract to build a bridge for a price of $8,420,000. During 2021, costs of $2,140,000 were incurred with estimated costs of $4,140,000 yet to be incurred. Billings of $2,640,000 were sent, and cash collected was $2,390,000. In 2022, costs incurred were $2,640,000 with remaining costs estimated to be $3,810,000. 2022 billings were $2,890,000 and $2,615,000 cash was collected. The project was completed in 2023 after additional costs of $3,940,000 were incurred. The companys 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 2021, 2022, and 2023 using the percentage of completion method.

+ = % complete to date 2021 $ Percentages UI CUMPLUI Choose numerator Choose denominator Actual costs to date Estimated total costs 2,140,000 $ 6,280,000 4,780,000+ $ 8,590,000 8,720,000 $ 8,720,000 2021 34.0764% 2022 $ = 55.6461% 100.0000% 2023 $ To date Recognized in prior years Construction revenue $ 2,869,236 $ 0 $ Recognized in 2021 2,869,236 2,140,000 729,236 $ $ 0 $ Construction expense Gross profit (loss) 2,140,000 729,236 $ $ 0$ 2022 To date 4,685,730$ Construction revenue $ Recognized in prior years 2,869,236 $ 2,140,000 $ 729,236 $ Recognized in 2022 1,816,494 (2,140,000) (729,236) $ Construction expense Gross profit (loss) $ Construction revenue $ 2023 To date Recognized in prior years 8,420,000 $ 4,685,402 $ 8,720,000 $ (300,000) Recognized in 2023 3,734,598 8,720,000 (300,000) $ Construction expense Gross profit (loss) $

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