Check my work Exercise 6-20 (Algo) Long-term contract; revenue recognition over time vs. upon project completion (LO6-9) On June 15, 2021, Sanderson Construction entered into a long-term construction contract to build a baseball stadium in Washington, D.C., for $310 million. The expected completion date is April 1, 2023, just in time for the 2023 baseball season. Costs incurred and estimated costs to complete at year-end for the life of the contract are as follows ($ in millions): 14:24 ok Costs incurred during the year Estimated costs to complete as of December 31 2021 2022 2023 $ 70 $60 $30 130 30 3 ces Required: 1. Compute the revenue and gross profit will Sanderson report in its 2021, 2022, and 2023 income statements related to this contract assuming Sanderson recognizes revenue over time according to percentage of completion. 2. Compute the revenue and gross profit will Sanderson report in its 2021 2022 and 2023 income statements related to this contract assuming this project does not qualify for revenue recognition over time. 3. Suppose the estimated costs to complete at the end of 2022 are $120 million instead of $30 million. Compute the amount of revenue and gross profit or loss to be recognized in 2022 assuming Sanderson recognizes revenue over time according to percentage of completion. Complete this question by entering your answers in the tabs below. Dondd DARAH Dada Check my 2. Compute the revenue and gross profit will Sanderson report in its 2021, 2022, and 2023 income statements related to th contract assuming this project does not qualify for revenue recognition over time. 3. Suppose the estimated costs to complete at the end of 2022 are $120 million instead of $30 million. Compute the amoun revenue and gross profit or loss to be recognized in 2022 assuming Sanderson recognizes revenue over time according to percentage of completion. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute the revenue and gross profit will Sanderson report in its 2021, 2022, and 2023 income statements related to this contract assuming this project does not qualify for revenue recognition over time. (Enter your answers in millions. Loss amounts should be indicated with a minus sign.) Year Revenue Gross Profit (Loss) recognized recognized 2021 $ 0 milions o million 2022 $ of million $ 0 million 2023 $ 310 million $ 30 million Man-Sorin Brittany Oun M Question 2 - Chapter 6 Home Ghar Google+ Homework Sad Help Save 3 Exit Check my 2. Compute the revenue and gross profit will Sanderson report in its 2021 2022 and 2023 income statements related to th contract assuming this project does not qualify for revenue recognition over time. 3. Suppose the estimated costs to complete at the end of 2022 are $120 million instead of $30 million Compute the amoun revenue and gross profit or loss to be recognized in 2022 assuming Sanderson recognizes revenue over time according to percentage of completion Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute the revenue and gross profit will Sanderson report in its 2021, 2022, and 2023 income statements related to this contract assuming this project does not qualify for revenue recognition over time. (Enter your answers in millions. Loss amounts should be indicated with a minus sign.) Year Revenue Gross Pront (Loss) recognized recognized 2021 $ o million 5 Omillion 2022 50 million $ o milion 2023 $ 310 million $ 30 milion (Required 1 Required 3 > 24 D) w 80 25 00 th se 38 $ & 2 3 4 5 6 7 8 9 W E R T Y U Check my wc + - Compute the revenue and gross profit will Sanderson report in its 2021, 2022, and 2023 Income statements related to this contract assuming Sanderson recognizes revenue over time according to percentage of completion. (Enter your answers in millions. Loss ama should be indicated with a minus sign. Use percentages as calculated and rounded in the table below to arrive at your final answer.) Percentages of completion Choose numerator Choose denominator % complete to date Actual costs to date Estimated total costs 2021 $ 70 $ 2001 - 35.00% 2022 $ 130 + $ 160 81.25% 2023 $ 160 $ 160 100.00% 2021 To date Recognized in prior years Recognized in 2021 Construction revenue $ 0 Construction expense $ 70 $ 0 $ 70 Gross profit (loss) $ 0 $ o 0 To date 2022 Recognized in prior years Recognized in 2022 0 Construction revenue Construction expense Gross profit (los) $ 130 $ $ 70 $ $ 60 0 To date 2023 Recognized in prior years 310 160 $ Recognized in 2023 Construction revenue Construction expense $ $ 130 $ $ 310 30
