On June 15, 2018, Sanderson Construction entered into a long-term construction contract to build a baseball stadium in Washington, D.C., for $330 million. The expected completion date is April 1, 2020, just in time for the 2020 baseball season. Costs incurred and estimated costs to complete at year-end for the life of the contract are as follows ($ in millions):

	2018			2019			2020
Costs incurred during the year	$	90		$	70		$	45
Estimated costs to complete as of December 31		160			40

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 $160 million instead of $40 million. Compute the amount of revenue and gross profit or loss to be recognized in 2019 assuming Sanderson recognizes revenue over time according to percentage of completion.

Requirement 1.

Percentages of completion
	Choose numerator		Choose denominator	=	% complete to date
2018				=
2019				=
2020
2018
	To date	Recognized in prior years		Recognized in 2021
Construction revenue
Construction expense
Gross profit (loss)
2019
	To date	Recognized in prior years		Recognized in 2022
Construction revenue
Construction expense
Gross profit (loss)
2020
	To date	Recognized in prior years		Recognized in 2023
Construction revenue
Construction expense
Gross profit (loss)

Requirement 2.

Year	Revenue recognized		Gross Profit (Loss) recognized
2018		million		million
2019		million		million
2020		million		million

Requirement 3.

Percentages of completion
	Choose numerator		Choose denominator	=	% complete to date
2019				=
2019
	To date	Recognized in prior Years		Recognized in 2019
Construction revenue
Construction expense
Gross profit (loss)