Reference no: EM131756390
On February 1, 2016, Arrow Construction Company entered into a three-year construction contract to build a bridge for a price of $8,000,000. During 2016, costs of $2,000,000 were incurred with estimated costs of $4,000,000 yet to be incurred. Billings of $2,500,000 were sent, and cash collected was $2,250,000.
In 2017, costs incurred were $2,500,000 with remaining costs estimated to be $3,600,000. 2017 billings were $2,750,000, and $2,475,000 cash was collected. The project was completed in 2018 after additional costs of $3,800,000 were incurred. The company's fiscal year-end is December 31. Arrow recognizes revenue over time according to percentage of completion.
Answer is complete but not entirely correct
| 2016 |
| To date |
Recognized in prior years |
Recognized in 2016 |
| Construction revenue |
$2,666,667 |
$0 |
$2,666,667 |
| Construction expense |
$(2,000,000) |
$0 |
$(2,000,000) |
| Gross profit (loss) |
$666,667 |
$0 |
$666,667 |
| 2017 |
| To date |
Recognized in prior years |
Recognized in 2017 |
| Construction revenue |
$4,444,444 |
$2,666,667 |
$1,777,777 |
| Construction expense |
$(4,544,444) |
$(2,000,000) |
$(2,544,444) |
| Gross profit (loss) |
$(100,000) |
$666,667 |
$(766,667) |
| 2018 |
| To date |
Recognized in prior years |
Recognized in 2018 |
| Construction revenue |
$8,000,000 |
$4,444,444 |
$3,555,556 |
| Construction expense |
$(8,300,000) |
$(4,544,444) |
$(3,755,556) |
| Gross profit (loss) |
$(300,000) |
$(100,000) |
$(200,000) |
|
I got everything right but need 2017 construction expense to date and 2018 construction expense recognized in prior years.