Don't give answer in image On February 1, 2021, ArrowConstruction Company entered into athree-year construction contract tobuild a bridge for a price of$8,225,000. During 2021, costs of$2,090,000 were incurred, withestimated costs of $4,090,000 yet tobe incurred. Billings of $2,608,000were sent, and cash collected was$2,340,000.In 2022, costs incurred were$2,608,000 with remaining costsestimated to be $3,735,000. 2022billings were $2,858,000, and$2,565,000 cash was collected. Theproject was completed in 2023 afteradditional costs of $3,890,000 wereincurred. The company's fiscal year-end is December 31. This project doesnot qualify for revenue recognitionover time.Required:1. Calculate the amount of revenueand gross profit or loss to berecognized in each of the three years.

Construction contract accounting involves the application of accounting principles and practices to…

On February 1, 2021, Arrow Construction Company entered into a three-year construction contract to build a bridge for a price of $8,225,000. During 2021, costs of $2,090,000 were incurred, with estimated costs of $4,090,000 yet to be incurred. Billings of $2,608,000 were sent, and cash collected was $2,340,000.

On February 1, 2021, Arrow Construction Company entered into a three-year construction contract to build a bridge for a price of $8,225,000. During 2021, costs of $2,090,000 were incurred, with estimated costs of $4,090,000 yet to be incurred. Billings of $2,608,000 were sent, and cash collected was $2,340,000.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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