Check my work On June 15, 2018, Sanderson Construction entered into a long-term construction contract to build a baseball stadium in Washington, D.C., for $400 million. The expected completion date is April 1, 2020, just in time for the 2020 baseball season. Costs incurred and estimated costs to complete at year-end for the life of the contract are as follows ($ in millions): 2 points Costs incurred during the year Estimated costs to complete as of December 31 2018 $ 60 190 2019 $130 60 2020 $55 - eBook Hint Required: 1. Compute the revenue and gross profit will Sanderson report in its 2018, 2019, and 2020 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 2018, 2019, and 2020 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 2019 are $190 million instead of $60 million. Compute the amount of revenue and gross profit or loss to be recognized in 2019 using the percentage of completion method. Print Required 1 Required 2 Required 3 Compute the revenue and gross profit will Sanderson report in its 2018, 2019, and 2020 income contract assuming Sanderson recognizes revenue over time according to percentage of completi millions. Loss amounts should be indicated with a minus sign. Use percentages as calculated and to arrive at your final answer.) = % complete to date Percentages of completion Choose numerator - Choose denominator Actual costs to date Estimated total costs $ 60 = $ 250 $ 190 = $ 250 2018 2019 2020 = = 24.00% 76.00% 100.00% To date 2018 Recognized in prior years $ 304 $ 96 Construction revenue $ Construction expense | $ Gross profit (loss) 96 0 Recognized in 2018 $ (208) $ (96) 2019 Recognized in prior years To date Recognized in 2019 Construction revenue Construction expense Gross profit (loss) 2020 Recognized in prior years To date Recognized in 2020 Construction revenue Construction expense Gross profit (loss) $ Required 1 Required 2 > Required 1 Required 2 Required 3 Compute the revenue and gross profit will Sand contract assuming this project does not qualify amounts should be indicated with a minus sign. Year Revenue recognized million Gross Profit (Loss) recognized million 2018 2019 million million 2020 million million Required 1 Required 2 Required 3 Suppose the estimated costs to complete at the end of 2019 are $190 million instead of $ revenue and gross profit or loss to be recognized in 2019 using the percentage of complet millions. Use percentages as calculated and rounded in the table below to arrive at your fi Percentages of completion Choose numerator - Choose denominator = | % complete to date 2019 2019 Recognized in prior Years To date Recognized in 2019 Construction revenue Construction expense Gross profit (loss) 69
