Question

On February 1, 2018, Arrow Construction Company entered into a three-year construction contract to build a bridge for a price of $8,600,000. During 2018, costs of $2,200,000 were incurred with estimated costs of $4,200,000 yet to be incurred. Billings of $2,700,000 were sent, and cash collected was $2,450,000. In 2019, costs incurred were $2,700,000 with remaining costs estimated to be $3,900,000. 2019 billings were $2,950,000 and $2,675,000 cash was collected. The project was completed in 2020 after additional costs of $4,000,000 were incurred. The company's 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 2018, 2019, and 2020 using the percentage of completion method? 2a. Prepare journal entries for 2018 to record the transactions described (credit "various accounts" for construction costs incurred). 2b. Prepare journal entries for 2019 to record the transactions described (credit "various accounts" for construction costs incurred). 3a. Prepare a partial balance sheet to show the presentation of the project as of December 31, 2018. 3b. Prepare a partial balance sheet to show the presentation of the project as of December 31, 2019. Complete this question by entering your answers in the tabs below. Reg 1 Req 2A Req 2B Req ЗА Req 3B Compute the amount of revenue and gross profit or loss to be recognized in 2018, 2019, and 2020 using th completion method? (Do not round intermediate calculations. Loss amounts should be indicated with a min your final answers to the nearest whole dollar.)

it says it's incomplete, please help

Answer 1

On Feb 2018, Arrow construction company entered into a 3 year construction contract to build a bridge for $ 8600000
During 2018, the cost of $2200000 were incurred and billing of $2700000 was sent and cash collected was$2450000.
Year	Numerator	/	Denominator	% of complete to date
2018	2200000		8600000	25.58
2019	7100000		8600000	82.56
2020	11100000		8600000	100.00	(but limited to 100%)
Numerator
2018	Total Expenses incurred on the project		2200000
2019	Total Expenses incurred on the project		4900000
2020	Total Expenses incurred on the project		4000000
Gross Profit to be calculated = Percentage of work completed X Total Project value
	Percentage of work completed	X	Total Project value	Total Gross Profit
2018	25.58	X	8600000	2200000
2019	82.56	X	8600000	7100000
2020	100.00	X	8600000	8600000
2018
		To date		Recognized in prior years	Recognized in 2018
Contruction Revenue		2200000		0	2200000
Contruction Expense		2200000		0	2200000
Gross Profit		0		0	0
2019
		To date		Recognized in prior years	Recognized in 2019
Contruction Revenue		7100000		2200000	4900000
Contruction Expense		7100000		2200000	4900000
Gross Profit		0		0	0
2020
		To date		Recognized in prior years	Recognized in 2020
Contruction Revenue		8600000		7100000	1500000
Contruction Expense		11100000		7100000	4000000
Gross Profit(Loss)		-2500000		0	-2500000
2a.	Journal entry for 2018
In the books of Arroe Contruction company
for the year ended 31, December 2018
Date	Particulars		Amount$	Amount$
31.12.2018	Various Accounts A/c   Dr		2200000
	To Accounts Payable			2200000
	(being cost recorded)
	Accounts ReceivablesA/c Dr		2700000
	To Billing			2700000
	( being billed amount recorded )
	Cash A/c                   Dr		2450000
	To Accounts Receivables			2450000
	( being cash collected)
2b.	Journal entry for 2019
In the books of Arroe Contruction company
for the year ended 31, December 2019
Date	Particulars		Amount$	Amount$
31.12.2019	Various Accounts A/c   Dr		7100000
	To Accounts Payable			7100000
	(being cost recorded)
	Accounts ReceivablesA/c Dr		2950000
	To Billing			2950000
	( being billed amount recorded )
	Cash A/c                   Dr		2675000
	To Accounts Receivables			2675000
	( being cash collected)
3a.	Balance Sheet for the year ended 31 December 2018
Particulars			Amount$	Amount$
Liabilities
Accounts Payable			2200000
Total Liabilities				2200000
Assets
Current Assets
Accounts Receivables			250000
Cash			2450000
Total Assets				2700000
3b.	Balance Sheet for the year ended 31 December 2019
Particulars			Amount$	Amount$
Liabilities
Accounts Payable			7100000
Total Liabilities				7100000
Assets
Current Assets
Accounts Receivables			275000
Cash			2675000
Total Assets				2950000

Contract Cost	8600000
Year	Cost	Cumulative cost	Cumulative % completion	Year on Year %	Cumulative revenue	YR on Yr revenue
2018	2200000	2200000	25.58	25.58	2200000	2200000
2019	4900000	7100000	82.56	56.98	7100000	4900000
2020	4000000	11100000	100.00	17.44	8600000	1500000
	11100000			100.00		8600000