Question
On February 1, 2021, Arrow Construction Company entered into a three-year construction contract to build a...
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.
In 2022, costs incurred were $2,608,000 with remaining costs
estimated to be $3,735,000. 2022 billings were $2,858,000, and
$2,565,000 cash was collected. The project was completed in 2023
after additional costs of $3,890,000 were incurred. The company’s
fiscal year-end is December 31. This project does not qualify for
revenue recognition over time.
Required:
3a. Prepare a partial balance sheet to show the
presentation of the project as of December 31, 2021
3b. Prepare a partial balance sheet to show the
presentation of the project as of December 31, 2022
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Answer #1
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