What is the total amount of Revenue from Long-Term Contracts recognized for 2021 and what is the balance in the Accounts Receivable account assuming Cannon Company has not yet made its last quarterly payment?

On February 1, 2021, Arrow Construction Company entered into a three-year construction contract to build a bridge for a price of $8,000,000. During 2021, 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 2022, costs incurred were $2,500,000 with remaining costs estimated to be $3,600,000. 2022 billings were $2,750,000, and $2,475,000 cash was collected. The project was completed in 2023 after additional costs of $3,800,000 were incurred. The company's fiscal year-end is December 31. This project does not qualify for revenue recognition over time. Required: 1. Calculate the amount of revenue and gross profit or loss to be recognized in each of the three years. 2a. Prepare journal entries for 2021 to record the transactions described (credit "various accounts" for construction costs incurred). 2b. Prepare journal entries for 2022 to record the transactions described (credit…

Velocity, a publicly traded corporation with a calendar fiscal year, entered into an agreement with Wedding Planners, Inc. a wedding event planning company on February 14, 2022. The contract specifies that the services will begin on March 1, 2022.  Velocity will design a marketing strategy to increase “hits” on Wedding Planners website by 40%.  The contract will last for 3 months (though May 31, 2022).    Wedding Planners promises to pay $25,000 at the beginning of each month for Velocity’s services with the first payment on March 1, 2022.    At the end of the contract, Velocity will be entitled to an additional $15,000 bonus, depending on whether traffic on Wedding Planners’ website has increased by the desired 40%.  At the inception of the contract, Velocity estimated there is an 85% chance that they will earn the $15,000 bonus and 15% likelihood they will not.   These probabilities are based on past experience with similar projects and the company has significant experience in these…

Cullumber, Inc. began work on a $7,164,000 contract in 2020 to construct an office building. During 2020, Cullumber, Inc. incurred costs of $1,960,630, billed its customers for $1,255,000, and collected $920,000. At December 31, 2020, the estimated additional costs to complete the project total $3,338,370.Prepare Cullumber’s 2020 journal entries using the percentage-of-completion method. (Credit account titles are automatically indented when amount is entered. Do not indent manually. For costs incurred use account Materials, Cash, Payables. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit enter an account title to record costs incurred enter a debit amount enter a credit amount enter an account title to record costs incurred enter a debit amount enter a credit amount (To record costs incurred.)     enter an account title to record billings enter a debit amount…