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 $340 million. The expected completion date is April 1, 2023. just in time for the 2023 baseball season. Costs incurred and estimated costs to complete at year-end for the life of the contract are as follows ($ in millions): Costs incurred during the year 2021 2022 2023 $ 40 $120 $50 Estimated costs to complete as of December 31 160 90 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 $160 million instead of $90 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 ces Complete this question by entering your answers in the tabs below. Required: 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 Sanderson recognizes revenue over time according to percentage of completion. (Enter your answers in millions, Loss amounts should be indicated with a minus sign. Use percentages as calculated and rounded in the table below to arrive at your final answer.) Show less Percentages of completion 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 amour should be indicated with a minus sign. Use percentages as calculated and rounded in the table below to arrive at your final answer.) Show les Percentages of completion Choose numerator Choose denominator % complete to date 0 2021 2022 2023 0 0 To date 2021 Recognized in prior years Recognized in 2021 0 Construction revenue Construction expenso Gross profit (loss) $ $ $ 0 0 To date 2022 Recognized in prior years Recognized in 2022 0 Construction revenue Construction expense Gross profit (loss) $ $ $ 0 0 2023 Recognized in prior years To date Recognized in 2023 0 Construction revenue Construction expense Gross profit (los) $ s 0 0 $ Bend 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 contrac assuming this project does not qualify for revenue recognition over time. 3. Suppose the estimated costs to complete at the end of 2022 are $160 million instead of $90 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. 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.) Revenue Gross Profit (Loss) Year recognized recognized 2021 0 millions 0 million 2022 $ 0 million $ 0 million 2023 million million 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 $160 million instead of $90 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. Required 1 Required 2 Required 3 Suppose the estimated costs to complete at the end of 2022 are $160 million instead of $90 million. Compute the amount of revenue and gross profit or loss to be recognized in 2022 using the percentage of completion method. (Enter your answers in millions. 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 2022 160s 320 - 50.00% $ To date 2022 Recognized in prior Years 170 $ Construction revenue Construction expenso Gross profit (loss) Recognized in 2022 $ 170 $ 0 $ 0